\u3000\u3000 Bestechnic (Shanghai) Co.Ltd(688608) (688608)
Core view
Hengxuan announced that the net profit attributable to the parent company in 21 years is expected to be about 410 million yuan, an increase of more than doubled, and the net profit not attributable to the parent company is deducted to be about 295 million yuan, an increase of more than 70%. In the fourth quarter, the net profits attributable to the parent and deducting non attributable to the parent in a single quarter were 116 million yuan and 86 million yuan respectively, with a year-on-year increase of 42% and 20% respectively, and a month-on-month increase of 10% and 17% respectively.
The team has a deep industry background and excellent R & D and innovation ability: many employees of the company have many years of working experience as senior executives and technical backbone in the leading enterprises in the semiconductor industry, and have complete ability in all links of positive IC design, including understanding the needs of terminal key customers, product definition, IP R & D, chip product R & D, supply chain management, technical support and sales, It has accumulated technical capabilities such as Bluetooth, RF and audio codec. The product has the advantages of high integration and low power consumption, and is expected to gain huge growth space in the competition of aiot. Hengxuan is also expected to take the lead in releasing 12NM process chips.
TWS headphone business continues to grow: according to the statistics of counterpoint and other institutions, the shipment volume of global brand TWS headphones increased by 81% to 230 million pairs in 20 years, with a penetration rate of 17.5%. After 21 years of high growth, there is still much room for improvement. Among them, the penetration rate of airpods in IOS ecosystem is high, while the penetration rate of TWS headphones in Android ecosystem still has room to improve, and white brand headphones occupy a high share. Compared with the development process of smart phones from white brand to brand, Android mobile phone brands are expected to expand their share by virtue of ecological, technological synergy and other advantages. Hengxuan focuses on brand customers and is the main supplier of Huawei, oppo, Xiaomi and other brand manufacturers. Its share in Samsung is expected to increase in 22 years. It also supplies professional headphone manufacturers such as JBL, Harman, Skullcandy and so on. At the same time, TWS headphones still have great room for improvement in sound quality, noise reduction, voice interaction, multi-sensor fusion and intelligence, and the unit price of main control chip is expected to continue to increase.
Differentiated new products are gradually implemented: in addition to maintaining the leading position of TWS headset master chip, hengxuan has entered new downstream applications in a differentiated way. In the highly competitive smart speaker market, hengxuan occupies a leading position in the portable segment track with the advantage of low-power technology, and has become a supplier of head manufacturers such as Alibaba, Xiaomi and Huawei. In the smart watch market, hengxuan’s main control chip has the advantages of high integration and low power consumption, helping customers solve the stringent requirements of volume and power consumption. It has been applied to many new products released by Huawei, Xiaomi, vivo and other customers since November 21. Hengxuan expects that the 12NM process chip mass produced in 22 years is expected to further improve the integration and power consumption advantages of watch main control chip
Profit forecast and investment suggestions
We predict that the company’s earnings per share in 21-23 years will be 3.44 yuan, 5.24 yuan and 7.84 yuan respectively (originally predicted to be 3.81 yuan, 5.78 yuan and 8.63 yuan, mainly due to the reduction of gross profit margin and the increase of R & D expenses). According to the comparable company’s PE valuation level of 40 times in 23 years, the corresponding target price is 313.60 yuan, maintaining the purchase rating.
Risk tips
The sales volume of brand TWS earphones is lower than expected, the sales volume of smart speakers and smart watches is lower than expected, the sales volume of 12NM new products is lower than expected, the price rise of Wafer Factory is higher than expected, and the pressure of transferring cost to downstream is lower than expected
