What happened: the company released its first quarter 2022 results. In the first quarter of 2022, operating income reached US $590 million, up 95.1% from the same period last year and 12.6% from the previous quarter. The net profit returned to the home was 100 million US dollars, an increase of 211.4% over the same period last year. The gross profit margin was 26.9%, an increase of 3.2 percentage points over the same period last year. The company expects 2022Q2 to have revenue of $615 million and a gross profit margin of 28% Murray 29%.
Capacity utilization remained high and ASP continued to improve. The sales revenue of 12-inch wafers in the first quarter of 2022 was US $262 million, up 379.5% from the same period last year, 27.4% from the previous month, and accounting for more than 44% of revenue. 12-inch growth potential has been fully released. The 8-inch platform has excellent profitability, with sales of 8-inch wafers of $330 million in the quarter, up 32.9% from a year earlier, up 3.1% from a month earlier, and a gross profit margin of 38.6%, up 11.3% from a year earlier. In this quarter, the company's monthly production capacity of 8-inch wafers reached 324,000, and 8-inch and 12-inch production capacity reached 178,000 and 65000 per month, respectively, and the total capacity utilization reached 106%. It is expected that strong downstream demand may continue to support the company's capacity utilization to remain high at 2022Q2. 2022Q1 automotive and new energy and other areas continue to lack core, power semiconductors, MCU, NOR flash, power management and other features of the demand for process products to maintain a high level, promoting the overall improvement of ASP, 8-inch wafers and 12-inch wafers ASP increased by about 26%.
Various technology platforms are growing at a high speed. Discrete devices and embedded non-volatile memory are the company's top two sources of revenue, accounting for 30.6% and 23.9% of revenue, respectively. Affected by the growing demand for NOR flash, power management products, CIS and logic products, revenue from stand-alone non-volatile memory, analog and power management, logic and radio frequency were $58.5 million, $120 million and $95.3 million, respectively, up 406%, 201% and 91% year-on-year. Platforms such as power devices, embedded non-volatile memory, analog and logical radio frequency have gradually completed 12-inch technology upgrades and mass production.
The process of 55x65nm is developing rapidly. On the process side, benefiting from the strong demand for Nor flash, CIS and logic products, the 55nm / 65nm process node achieved revenue of US $100 million, up 712% from the same period last year, accounting for 17.3% of revenue. The strong demand for smart card chips, MCU and power management chips led to a year-on-year increase of 176% in 90X 95 nm process nodes, accounting for 21% of revenue. In addition to the decline in revenue of 250nm nodes, other process technology nodes have achieved rapid growth.
Profit forecast and rating: the company's net profit is expected to grow at a compound rate of 23.8% in the next three years. Considering the company's 8-inch steady growth, 12-inch rapid growth and persistently high capacity utilization, it will give the company twice the PB in 2022 with a target price of HK $38.78. Cover for the first time, giving a "buy" rating.
Risk hint: downstream demand may be lower than expected, production expansion may be lower than expected, and US equipment control measures will increase the risk.