2022-05-16 Oriental Securities Co., Ltd. Qian Jian, Ma Tianyi and Tang Quanxi studied Semiconductor Manufacturing International Corporation and released a research report entitled "single-quarter revenue and gross profit margin hit record highs again, with strong guidance for the whole year." this report gives a buy rating to Semiconductor Manufacturing International Corporation. It is believed that its target price is 64.13 yuan, and the current stock price is 42.77 yuan, with an expected increase of 49.94%.
Semiconductor Manufacturing International Corporation (688981)
Core viewpoints
What happened: the company released its quarterly report for 22 years.
Revenue and gross profit margin hit new highs in a single quarter, with strong guidance for the whole year. The company's Q1 revenue was 11.9 billion yuan, an increase of 63% over the same period last year and 16% month-on-month. The revenue performance was in line with expectations. The net profit of returning to the mother was 2.84 billion yuan, an increase of 175% over the same period last year. Q1 gross profit margin is 41.2% (40.7% under international accounting standards), far exceeding the previous guideline of 36% MUE 38%, mainly due to: 1) the epidemic affected factories in Tianjin and Shenzhen to a lower extent than expected; 2) the company delayed the repair of factories to Q2. Looking ahead to Q2, considering the short-term impact of year-on-year repair and the epidemic on Shanghai factory capacity utilization, the company expects sales revenue to increase by 1% Mel 3% month-on-month, with a gross profit margin of 37% Mel 39%. For the whole year, the company expects 22-year sales revenue growth to be better than the contract manufacturing industry average, and gross profit margin better than expected at the beginning of the year (which is expected to be higher than the 21-year gross margin level at the beginning of the year).
Production capacity was further expanded and capacity utilization remained high. The company's 22Q1 production capacity is 649,000 equivalent 8-inch wafers, an increase of 4.5% month-on-month. Under the dual reserve effect of the company's diversified customers and multi-product platforms, capacity utilization continues to be fully loaded. The company's Q1 capital expenditure is about 5.5 billion yuan, and the planned capital expenditure for the whole year is about 32.1 billion yuan, which is a further increase compared with 21 years. It is mainly used to promote the expansion of the old plant and three new plant projects. At present, the 12-inch foundry production line of 28nm and above in Shanghai Lingang New area has been built at the beginning of the year, and the new plants in Beijing and Shenzhen are progressing steadily and are expected to be put into production by the end of 22nd, which will help the company double its production capacity.
The continuous optimization of product structure has led to the steady improvement of ASP. At present, semiconductors are entering a structural shortage market, and there is a large structural capacity gap in incremental markets such as the Internet of things, electric vehicles, and mid-and high-end analog IC. The company complies with the industry trend, the proportion of smart phones has declined, and smart home and other types of wafers account for 48% of the total income, increasing 3pct compared with the previous month. Driven by improved product structure and rising prices, single wafer ASP (about 8-inch wafers) reached $926 in the first quarter, up a further 13% from a month earlier. In addition, the company's 12-inch revenue share continues to rise, with Q1 accounting for nearly 67%, up 5pct from a year earlier and 2pct from a month-on-month basis. The marginal benefit of the company's output continues to improve, further tamping the technological moat
Profit forecast and investment suggestion
We forecast that the company's net return profit for 22-24 years will be 1.1288 billion yuan respectively (the original forecast for 22-23 years will be 11.06 billion yuan respectively, mainly raising revenue and gross profit margin forecast). Using the DCF valuation method, we will give the target price of 64.13 yuan and maintain the buy rating.
Risk hint
The risk of capacity climbing is not as expected; the risk of R & D is not as expected; the risk of customer introduction is not as expected; the risk of difficult purchase of production equipment; the risk of continuous uncertainty of preferential tax rate
Based on the research data released in the past three years, the Securities Star data Center calculated that China International Capital Corporation Cheng Qiaosheng's research team studied the stock more deeply, with an average forecast accuracy of 72.45% in the past three years, with a net profit of 9.905 billion in 2022, and a forecast PE of 33.92 based on current prices.
Details of the latest profit forecasts are as follows:
A total of 10 agencies have rated the stock in the last 90 days, eight have bought ratings and two have increased their holdings; the average institutional target price has been 80.5 in the past 90 days. According to the Securities Star valuation analysis tool, Semiconductor Manufacturing International Corporation (688981) has a good company rating of 3 stars, a good price rating of 1.5 stars and a comprehensive valuation rating of 2 stars. (rating range: 1-5 stars, up to 5 stars)