\u3000\u3000 Hangzhou Silan Microelectronics Co.Ltd(600460) (600460)
Events
Hangzhou Silan Microelectronics Co.Ltd(600460) release the annual performance forecast for 2021: it is estimated that the net profit attributable to the parent company in 2021 will be 1.518 billion yuan – 1.531 billion yuan, with a year-on-year increase of 2145% – 2165%, and the net profit attributable to the parent company after deducting non profits will be 912 million yuan – 926 million yuan.
Key investment points
The performance forecast of 2021 exceeded expectations, and the company continued to grow at a high speed
According to the calculation of the company’s annual performance forecast in 2021, the company’s net profit attributable to the parent company in Q4 in 2021 is expected to be 790 million yuan – 803 million yuan, and the net profit attributable to the parent company after deduction is 225 million yuan – 239 million yuan. The high-speed growth of the company’s performance mainly benefits from: 1) basically completing the production capacity construction goal set at the beginning of the year in 2021, the products continue to make breakthroughs in high threshold markets such as white power, communication, industry, photovoltaic and new energy vehicles, the operating revenue of power management chips, MEMS sensors, IPM, MOSFET, IGBT, SBD, TVs, FRD and led increases significantly, and the product structure continues to be optimized, The comprehensive gross profit margin improved significantly and the operating profit increased significantly; 2) In 2021, Shilan Jixin 8-inch line will basically maintain full production, and continuously optimize the product structure to achieve annual profit. Shilan Mingxin LED chip production line will achieve full production, high yield and annual profit; 3) In 2021, the value of other non current financial assets held by the company increased significantly, of which Shanghai Anlogic Infotech Co.Ltd(688107) was listed on the science and innovation board in November 2021. The share of net assets enjoyed by the company was adjusted according to the fair value at the end of the period, resulting in an increase in net profit of 534 million yuan. Since the introduction of external investors in 2021, the share of net assets enjoyed by the company was adjusted according to the fair value at the end of the period, resulting in an increase in net profit of 52 million yuan.
China’s leading enterprises in IDM field have gradually released their production capacity
The company is one of the few IDM semiconductor enterprises in China. Its products include various power supply products, frequency conversion control systems and chips, MEMS sensor products, power semiconductor products represented by IGBT, superjunction MOSFET and high-density grooved gate MOSFET, intelligent power module products (IPM), industrial and vehicle specification power module products (PIM), high-voltage integrated circuits Mecca LEGO reliability index LED color screen pixel tube, etc. In terms of production capacity, the company has a 5-12 inch chip production line, of which the monthly production capacity of Shilan integrated 5 / 6-inch production line is about 200000 pieces, the monthly production capacity of Shilan Jixin 8-inch line is between 60000 and 65000 pieces, and the monthly production capacity of Shilan Jike 12-inch line has reached 40000 pieces, which is expected to climb to 60000 pieces / month by the end of 22; In terms of application fields, the company’s discrete devices and high-power modules, in addition to accelerating the market expansion in white power, industrial control and other markets, have begun to accelerate their entry into new energy vehicles, photovoltaic and other markets. Among them, the main motor drive module of electric vehicles with v-generation IGBT and frd chips independently developed by the company has passed the test in many customers in China and began to be supplied in batches in some customers; In terms of customers, the company’s products have been recognized by global brand customers such as Xiaomi, vivo, oppo, Haikang, Dahua, Midea, Gree, Hisense, Haier, Huichuan, LG, OSRAM, Sony, Delta, Dako and NEC in Japan.
We believe that the company, as a domestic IDM leading enterprise, has achieved full production of 5 / 6 and 8-inch lines. With the gradual release of the production capacity of 12 inch lines and the accelerated layout of the company in the field of photovoltaic and new energy vehicles, it is expected to achieve sustained and rapid growth in the future.
Capital increase and overweight of eight inch production line and compound semiconductor, and the equity incentive is exciting
On December 23, 2021, the company issued the announcement of capital increase to Shilan Jixin, which plans to invest 561 million yuan for the phase II project of 8-inch integrated circuit chip production line, so as to further promote the development of special process R & D and manufacturing platform of the company’s 8-inch production line, enhance the company’s manufacturing capacity and profitability, and enhance its comprehensive competitiveness, The company’s eight inch line has turned losses into profits in the first three quarters of 2021. At the same time, the company increased its compound business. On November 30, 2021, the company announced that it plans to add 90 million yuan and 210 million yuan to Shiming gallium with Xiamen semiconductor investment group respectively. The main purpose is to increase the capital adequacy ratio and speed up the construction and operation of compound semiconductor production line. Shiming gallium has basically realized the production capacity of 50000 4-inch compound chips per month in the first half of 2021, The company is making progress towards the capacity of producing 70000 pieces per month. In the first half of 2021, the company’s research and development of silicon-based GaN compound power semiconductor devices is continuously promoted, and the pilot line of SiC power devices has been connected.
In addition, on December 23, 2021, the company issued an equity incentive plan, granting 2419 senior managers and core technical backbones a total of 2003.25 million shares at an exercise price of 51.27 yuan. The total amortization expense is expected to be 177 million yuan, which will be amortized by 78 / 0.51/0.31/0.14 million yuan from 2022 to 2025. According to the performance target of this incentive, the cumulative revenue of the company from 2021 to 2024 will increase by 767% compared with 2020, which shows the company’s confidence in the long-term development of performance. At the same time, this is the first equity incentive of the company in more than ten years, which is conducive to improving the cohesion of talents and contributing to the long-term and stable development of the company.
Profit forecast
Without considering the impact of additional issuance, it is predicted that the company’s revenue from 2021 to 2023 will be 7.384 billion yuan, 10.158 billion yuan and 13.243 billion yuan respectively, and EPS will be 1.07, 1.10 and 1.44 yuan respectively. At present, the corresponding PE of the stock price is 47, 45 and 35 times respectively, giving the “recommended” investment rating.
Risk tips
Downside risk of industry prosperity, lower than expected progress of capacity climbing, lower than expected progress of additional issuance, increased risk of industry competition, risk of overseas policy changes, etc.
