\u3000\u3000 Amlogic (Shanghai) Co.Ltd(688099) (688099)
On January 17, Amlogic (Shanghai) Co.Ltd(688099) released the annual performance forecast for 2021. The company expects to achieve an operating revenue of RMB 4.74-4.79 billion in 2021, a year-on-year increase of 73.10% – 74.93%; The net profit attributable to the parent company was 780-840 million yuan, a year-on-year increase of 579.24% – 631.49%; The net profit attributable to the parent company after non deduction was 670-730 million yuan, with a year-on-year increase of 688.18% – 758.76%.
21q4 performance growth exceeded expectations, and the scale effect and structure improved significantly. From the single quarter of 21q4, it is expected that the company’s operating revenue in 21q4 will reach 1.507-1.512 billion yuan, with a year-on-year increase of 54.81% – 55.32% and a month-on-month increase of 22.37% – 22.78%; The net profit attributable to the parent company was RMB 278-338 million, with a year-on-year increase of 117.09% – 163.925 and a month-on-month increase of 10.33% – 34.13%; The net profit attributable to parent company after non deduction was 238-298 million yuan, with a year-on-year increase of 112.78% – 166.33% and a month-on-month increase of 20.21% – 50.46%. The median value of the forecast corresponds to 17.78% of 21q4 company’s net interest rate deducted from non parent company, with a month on month increase of 1.67pct. The profitability reached a record high and the performance growth exceeded market expectations. We believe that it is mainly due to the prominent scale effect brought by the growth of the company’s revenue and the improvement of business structure.
SOC shipments of set-top boxes and AI audio and video terminals increased rapidly, and the overseas market share increased rapidly. In 2021, the demand of the consumer electronics industry continued to grow, and the trend of overseas TV Internet developed rapidly. The company actively grasped the market opportunity, strengthened market development, and rapidly expanded the overseas market. The shipments of intelligent set-top box chips and AI audio and video system terminal chips increased rapidly, further consolidating and improving the market position. In terms of set-top box chips, in addition to maintaining a high share advantage in the Chinese market, the company has entered more than 100 operators around the world, and its overseas market share has increased rapidly and there is still huge room for improvement; In terms of AI audio and video SOC, the company’s products are shipped to many major customers outside China, and has cooperated with many product lines with international major customers such as Google and Amazon, realizing rapid growth in 2021.
WiFi and automotive electronics business are progressing smoothly, and new products can be expected in large quantities. With the help of existing high-quality customer groups and channel advantages, the company will accelerate the introduction of new products in 2021. The shipment of WiFi Bluetooth chips has increased significantly. 20q3 company has realized the mass production of the first WiFi chip. In August 2021, it launched WiFi 5 + Bluetooth 5.2 chip, which is suitable for Xiaomi TV stick and other products. It is expected that the company will launch the next generation of WiFi 6 products in 2022, and the shipment and unit price are expected to rise. In terms of automotive electronics business, the company’s on-board infotainment system master SOC market has developed smoothly. The company’s high-performance on-board entertainment processor v901d chip has been shipped to Lincoln, BMW and other high-end models, and other manufacturers are also developing in succession. At the same time, the company’s new generation of intelligent cockpit chip is expected to be launched in 2022. In terms of smart TV chips, although the growth is limited due to the demand of the TV industry, the company also has overseas customers and new markets such as projectors.
Investment suggestion: we expect the net profit attributable to the parent company in 2021, 22 and 23 to be RMB 8.1/11.28/1.548 billion respectively, and the corresponding current price PE to be 65 / 47 / 34 times respectively. As the leader of China’s audio and video SOC, the company is expected to maintain high growth in 2022, cover it for the first time, and give a “recommended” rating.
Risk warning: downstream demand is less than expected; New product development is not as expected; Overseas market development is less than expected; Market competition intensifies.
