Benefiting from the chip price rise superimposed by the global core shortage tide, the performance of A-share semiconductor enterprises in 2021 is satisfactory.
According to the data, as of January 19, 31 semiconductor companies have disclosed the performance forecast for 2021: 30 companies have achieved performance growth in 2021, of which Shenzhen Absen Optoelectronic Co.Ltd(300389) (300389) and Tianyue advanced -u (688234) have successfully reversed their losses, and only the performance forecast of Jielun Electronics (688206) has been reduced.
The performance “pre increase king” is temporarily won by Dongxin Co., Ltd. (688110). The company expects to realize a net profit of about 225-240 million yuan in 2021, with a year-on-year increase of 1052% – 1129%. A total of 15 companies, including the company, are expected to double their performance.
If compared with the situation of the previous year, 21st Century Capital Research Institute found that the two led companies have doubled and doubled their growth on the basis of the decline in performance in 2020, which has become the most prominent link in the contrast of each subdivided industry.
In addition to the blowout of subdivided industries, what are the hidden surprises and risks in the performance of semiconductor companies last year? This phase of hard core investment research will be deeply analyzed.
the performance of chip stocks increased collectively
In terms of net profit growth, Dongxin’s net profit in 2021 exceeded 10 times that of the previous year, making it the only semiconductor company with a net profit of more than 10 times.
On January 19, the 21st Century Capital Research Institute asked the company about the performance of Dongxin 2021. Dongxin said, “after early accumulation, the company’s performance in recent years can grow at a faster rate. In addition, 2020 is the company’s first profit (19.53 million), and the base is relatively small, which makes the profit increase significantly year-on-year in 2021. The prosperity of the chip market is one of the reasons.”
Previously, the market was worried about whether the sales proportion of Dongxin in Europe and America decreased year by year and whether the instability of customers would affect the future performance. Dongxin responded that “the decline in the share of European and American markets is a relative process, mainly because the Chinese market is developing rapidly at present. The early accumulation has led to more Chinese customers in recent years, and is also supported by international situation, domestic substitution and other factors.”
In addition, Shanghai Bright Power Semiconductor Co.Ltd(688368) (688368), Jilin Sino-Microelectronics Co.Ltd(600360) (600360), Guangdong Leadyo Ic Testing Co.Ltd(688135) (688135), Puya Semiconductor (Shanghai) Co.Ltd(688766) (688766) and other 14 semiconductor enterprises are expected to exceed 100% of the lower limit of net profit growth in the first half of the year.
In terms of volume, the 2021 performance of photovoltaic silicon material and cell giant Tongwei Co.Ltd(600438) (600438) temporarily ranks first among semiconductor enterprises. Benefiting from the soaring price of silicon products and the first production capacity in the industry, the company expects the net profit attributable to listed shareholders to be 8 billion yuan to 8.5 billion yuan, a year-on-year increase of 122% to 136%.
Radio frequency leader Maxscend Microelectronics Company Limited(300782) (300782) followed. It is estimated that the net profit attributable to shareholders of Listed Companies in 2021 will be RMB 2.05 billion to RMB 2.157 billion, with a year-on-year increase of 91.09% to 101.06%. The announcement said that the performance growth was mainly due to the incremental market demand for RF front-end products generated by the development of 5g communication technology, combined with the company’s advantageous layout in supply chain management.
It is worth noting that Jielun electronics is the only enterprise with declining performance in the disclosure of the annual report forecast. Galen Electronics was listed on the science and Innovation Board last December and is known as the first share of domestic EDA (electronic system design automation). EDA belongs to the upstream of the integrated circuit industry chain and is the first link of chip production. After EDA completes the chip design and simulation test, there will be subsequent streaming and production.
It is estimated that the operating revenue of Galen electronics in 2021 will be 180 million to 200 million yuan, with a year-on-year increase of 31% to 45%, and the net profit attributable to the shareholders of the parent company will be 22 million to 26 million yuan, with a year-on-year decrease of 10% – 24%, mainly due to the relatively high non recurring profits and losses such as government subsidies and income from financial products last year. In order to implement the sustainable development strategy, Increase talent recruitment and investment in various R & D projects, resulting in a significant increase in relevant expenses.
LED industry dilemma reversal
Among the enterprises that have published the annual report forecast, Tianyue advanced-u (688234) and Shenzhen Absen Optoelectronic Co.Ltd(300389) (300389) will turn around their losses in 2021.
Tianyue advanced was listed in January 2021. It is the first listed company of silicon carbide. Silicon carbide is the substrate material of the third generation semiconductor.
However, looking up the transcripts of previous years, Tianyue advanced’s previous losses were not caused by operation. According to the prospectus, the company was not profitable in 2019 and 2020, mainly due to the implementation of equity incentive and the recognition of high share based payment expenses. After deducting non recurring profits and losses, the company achieved profits in 2019 and 2020.
The performance growth in 2021 is due to the expansion of the company’s production capacity and the continuous rise of sales scale, driving the growth of operating revenue and profit. In 2021, the net profit was about 65 million yuan to 105 million yuan, with a year-on-year increase of 110.13% to 116.36%.
Another loss recovery enterprise is Shenzhen Absen Optoelectronic Co.Ltd(300389) . The company’s main business is led product research and development. It is one of the earliest LED display enterprises exported overseas. According to the annual report, the Shenzhen Absen Optoelectronic Co.Ltd(300389) loss in 2020 was 73.68 million yuan, a year-on-year decrease of 166.33%. The chairman of Shenzhen Absen Optoelectronic Co.Ltd(300389) once explained in a public interview that 80% of the company’s business is exported overseas. In 2020, affected by the epidemic, almost all overseas businesses returned to zero for a period of time.
In 2021, Shenzhen Absen Optoelectronic Co.Ltd(300389) turned losses into profits, and the net profit is expected to be about 23 million to 31 million yuan, with a year-on-year increase of 132.3% to 143.6%. The company said that due to the strategic investment in overseas key areas and the expansion of channels, the business in overseas markets has gradually recovered; Deeply cultivate the Chinese market and form a relatively complete channel management system.
From the situation of LED industry, the turnaround is mainly driven by the recovery of overseas market and Chinese market.
For example, led leader Mls Co.Ltd(002745) (002745) also reached a new high in 2021. The company expects the net profit to increase by 264.55% to 297.7% year-on-year, and the net profit to be 1.1 billion to 1.2 billion yuan.
Yu Bin, an analyst at the photoelectric Research Office of rendeforce Jibang consulting, analyzed that in terms of the Chinese market, the overall demand of the LED display industry has exceeded that before the epidemic, but the overseas market is still recovering. Therefore, if LED display enterprises focusing on overseas markets want to open up the Chinese market, they should also actively adapt to the needs of the Chinese market and adjust and layout in time.
On January 19, a senior employee in the LED industry told the 21st Century Capital Research Institute, “before 2020, the ‘internal turnover’ of China’s LED chip industry is very serious, and the gross profit of LED chips and related industrial links is low, resulting in less production capacity of the whole industry and few procurement in China.
The change took place in the fourth quarter of that year. As the chip was stuck by foreign countries, China began to independently develop the semiconductor industry, and medium and low-end chips encouraged product substitution. “
\u3000\u3000 “In the first half of 2021, overseas affected by the epidemic hardly contributed to production capacity. At the same time, China’s demand for large-scale activities increased, including more government engineering projects such as the Winter Olympic Games, and the demand for lamps increased greatly, which also led to the rapid rise in the prices of LED related display chips and drive chips, and the gross profit margin also increased after the cost was transmitted downstream. Therefore, the performance table of relevant enterprises Now it’s better. ” The source further analyzed.
The employee predicted that “the increment of LED chip industry from overseas market may continue in the next 3-5 years. However, the Chinese market has obvious periodicity. The first quarter of 2022 may fall back compared with last year. With the reduction of infrastructure investment and inventory products, it is expected to gradually pick up in the second quarter.”
When will the prosperity of the industry be maintained?
21st Century Capital Research Institute found that almost all companies mentioned the reasons why the IC industry continued to maintain a high outlook and strong terminal demand in 2021 when explaining the reasons for performance growth.
Taking Dongxin Co., Ltd., which led semiconductor enterprises in net profit growth of 10 times last year, as an example, the company focuses on the R & D, design and sales of small and medium-sized general-purpose memory chips, and its main products are nandflash, DRAM and norflash.
According to icinsights, the above three types of products account for 98% of the storage chip market in 2020. Dongxin Co., Ltd. is a rare memory chip enterprise in China that can provide three kinds of product solutions at the same time.
Dongxin said that the substantial growth in performance in 2021 was due to the recovery of the market, the continuous optimization of product structure, the increase in the proportion of high value-added products, the gradual emergence of scale effect and the increase of sales gross profit margin; With the continuous enrichment of the company’s product line, the sales scale to customers who have completed the import period has gradually expanded, and the sales scale of the company’s flash memory chips has continued to increase.
From the perspective of the industry as a whole, from the analysis of supply-demand relationship: the supply side is mainly affected by the epidemic, resulting in tight supply of upstream raw materials and insufficient foundry capacity of wafers; On the demand side, due to the “core shortage tide”, the terminal factories of finished products factories continue to increase safety inventory for the safety of the supply chain, and the shortage of supply is exacerbated by over stocking. In the case of short supply, the semiconductor industry seems to have become a seller’s market.
However, under the good performance, a question in the hearts of investors is, can the global semiconductor boom continue to make rapid progress?
Judging from the current situation, the capacity of wafer foundry is still full. According to the data of the International Semiconductor Industry Association (semi) and the international information technology service company Gartner, as of the fourth quarter of 2021, the capacity utilization rate of global wafer factories has reached 92%, which is close to saturation. The cycle of chip capacity expansion is about 1-2 years, and the current round of chip shortage may last until the second quarter of 2022.
The rising trend of semiconductor prices is also confirming this judgment.
On January 17, according to the securities times, with the expiration of the production contract in 2021, the foundry price of wafers in the 2022 Production Contract negotiated between TSMC and customers has been comprehensively increased. In order to ensure its own capacity, Apple has accepted TSMC’s price increase and has contracted TSMC’s 120000-150000 4nm capacity.
However, some voices believe that the wafer foundry industry has maintained a fierce rise for five consecutive quarters and will also maintain a rise in the first quarter of this year. In the case of falling demand and continuous noise, and it is difficult for many chip customers to transmit cost pressure to the downstream, the rise of wafer OEM quotation in the second quarter will be suspended or the increase will converge significantly.
In fact, 21st Century Capital Research Institute has previously noted that the profit growth of chip bull stocks such as Maxscend Microelectronics Company Limited(300782) , Fuman electronics and Will Semiconductor Co.Ltd.Shanghai(603501) slowed down in the third quarter of 2021, which obviously affected the market expectation.
According to Shanghai Securities News, the upstream of the semiconductor industry chain is expected to remain tight in 2022; However, affected by demand, downstream chip products enter the differentiated market of supply and price, or will move towards structural core shortage. The supply of panel drive IC, consumer MCU and mass storage began to loosen, and the prices of some products began to fall. However, the demand in the fields of consumer electronics, automobile and industrial control is very strong.
Citic Securities Company Limited(600030) also believes that the prosperity is expected to continue in 2022, but the growth rate will be lower than that in 2021. Semiconductor equipment, materials and parts are new outlets for product substitution. It is expected that 2022 and the next three to five years will go through the process of continuous verification and capacity implementation. At the same time, the share of beneficiary industries will increase rapidly, and some companies are expected to achieve 40% or even 50% growth.
In terms of valuation, Citic Securities Company Limited(600030) said that since the second half of 2021, the semiconductor sector began to callback one after another, and the valuation level at the beginning of 2022 has been lower than the historical median. At present, it is relatively left. In the follow-up, with the confirmation of industry prosperity, the rise of product prices, the catalysis of emergencies, the improvement of risk appetite and other factors, it is expected that there are still periodic upward opportunities for valuation.
In other words, it may be difficult for the semiconductor industry to reproduce the collective soaring stock price in 2021 in 2022, but what should rise will still rise.
