Investment logic: 1) Analog switch chips are highly competitive and the global market share will increase rapidly. At present, the main customers of the company's analog switch are domestic mobile phone brands, with a 70% share in the OPPO supply chain, with an obvious competitive advantage. The global switching interface IC has a size of more than US $5 billion, and the company has a market share of only 0.66%. There is huge room for improvement. In the future, the company is expected to continue to expand the share of major Android customers at home and abroad, and expand the share of major customers in the consumer electronics field outside mobile phones, and the market share of products such as switches is expected to increase rapidly. 2) A number of automotive chips will hit the ground, and profitability and growth will reach a new level. Based on the differentiated, high-end product strategy and core competitiveness, the company's strategy to increase R & D investment and market development in the industrial and automotive market, and quickly achieved results. In 2022, H2, the company will gradually supply a number of car chips to domestic new energy vehicle leaders. At present, the company can supply products worth more than 300 yuan per bike, and it is expected that the proportion of automotive electronics revenue will increase to about 10% in 2023. Significantly improve the company's overall profitability and growth. 3) excellent product definition ability helps the company to maintain a high gross profit margin in the long-term sawing process of domestic simulated IC market. The company's management and R & D team adhere to the high-end and differentiated product definition, and continue to develop and build products with medium and high voltage, high bandwidth, high speed and high power density as the core. Excellent product definition ability is expected to keep the company's gross profit margin above 50%.

Core competence: high status of leading products, unique design, medium and high pressure technology and management concept support the company's product differentiation and sustainable iteration. The company's main business signal chain and power management chip, the core products are analog switches, operational amplifiers and LED drivers. At present, the company's analog switch has the largest market share in the signal chain interface market in China and the 10th in the world. As the company's ultra-high-speed USB switch products have no domestic manufacturers to replace in a short period of time, the leading products are expected to rise steadily in the global position, and there is a huge room for market promotion. The company's design competitiveness lies in its application to core technologies such as phase-locked loops in different analog product lines and core architectures such as high-precision operational amplifiers. Management's deep understanding of the application market is conducive to product differentiation and sustainable iteration.

Consumer electronics: low inventory and increased market share of core products help companies through the cycle. 1) the company is expected to be limited by this round of inventory adjustment: with its high-end, differentiated product strategy, the company avoids the competitive areas of serious homogenization and low gross margin, and the inventory is not significantly overstocked. 2) the company will quickly increase the market share of its core products: the company's analog switch still has a low customer share except OPPO, while DIO4480 and DIO5000 supply XIAOMI account for only 30% of their similar products. In the future, the company's market share of switches and other products is expected to increase rapidly, because the company is expected to: a) continue to expand the share of domestic mobile phone brands such as XIAOMI and vivo; b) break through the most high-end models of international mobile phone manufacturers, and will continue to expand the middle and high-end share in the future to achieve rapid expansion of overseas mobile phone customers. C) expand the share of major customers in consumer electronics other than mobile phones, such as G, VR SoC and PC OEM in the wearable field, and the company will achieve rapid growth in IoT, VR and other fields in the future.

Automotive electronics: a number of chips will be introduced into the domestic new energy vehicle leader one after another, which is expected to significantly increase the company's performance in 2023. IDC estimates that the automotive simulation IC market will be about $7.6 billion in 24 years and 17% of CAGR in 3 years. Since 2022H2, it is expected that the company will gradually introduce its core products into domestic new energy vehicle leaders, including lamp LED drive, USB switch, motor drive, operational amplifier and other products. It is expected that the company's current products can cover the bicycle value of more than 300 yuan, and is expected to achieve a rapid breakthrough in the share of major customers in 2023. The overall gross profit margin of the company's automotive customer chip is significantly higher than that of consumer electronics customers. We expect that the company's business income from automotive electronics will reach 0.2 / 100 million yuan in 2222, and the revenue share will increase to more than 10%. Significantly improve the company's overall profitability and growth.

Profit forecast and investment advice: the compound growth rate of the company's homing net profit in the next three years is expected to exceed 50%. Based on the increase of the company's market share in high-end consumer electronics and the company's volume breakthrough in the industrial and automotive markets, it is estimated that the company's 23-year net profit will be 250 million / 420 million yuan respectively, giving the company 43 times PE in 23 years, corresponding to the target market capitalization of 18.1 billion yuan and the target price of 71.81 yuan. Cover for the first time, giving a "buy" rating.