Domestic firmware leader, giving a "buy" rating for the first time
The company is the leader in the domestic BIOS and BMC firmware industry, under the background of domestic substitution, the domestic firmware welcomes the development opportunity, the company's products have adapted to the domestic mainstream chip brands, and are expected to fully benefit; after years of development, the company's technology accumulation and competitiveness are constantly increasing, and the market share of Intel Corp BIOS firmware is expected to continue to improve.
Since 2021, the company has continuously repurchased its shares and the chairman of the board has increased its shareholdings, demonstrating growth confidence. The completion of the company's stock incentive plan in September 2022 is expected to fully stimulate growth vitality. We estimate that the return net profit of the company from 2022 to 2024 is 0.60,1.01 and 141 million yuan respectively, the corresponding EPS is 0.69,1.16,1.62 yuan respectively, and the corresponding share price PE is 62.6,37.5 and 26.8 times respectively. Cover for the first time, giving a "buy" rating.
Firmware industry: the global market exceeds 10 billion yuan, and the industry has high barriers (1) according to IDC data, global server and PC shipments in 2021 are 13.54 million and 349 million units, according to the price of 200-300 yuan per X86 server and 10-15 yuan per X86PC, the market space for server and PC firmware is 41 yuan and 5.2 billion yuan respectively, considering that there is also a broad space for IoT equipment, the overall market space for firmware is expected to exceed 10 billion yuan. (2) firmware development needs to adapt and verify CPU, which involves the confidential hardware parameters of CPU manufacturers, so it has a high entry threshold; firmware needs to support a large number of hardware devices with different structures and characteristics, so long-term engineering experience is needed, and the company has a significant competitive advantage as a domestic firmware leader.
Growth-driven: high demand growth and increased business market share drive growth (1) under the continuous stimulation of the external environment, self-control has become the only way, and the national level has also continued to introduce policies to support the landing of domestic industries. From the perspective of industry applications, telecom operators have issued domestic software and hardware bidding projects such as storage and servers, and the proportion of domestic server procurement has been increasing. In trusted computing system, BIOS firmware is the security root and starting point of traditional trust chain, and its importance is highlighted. With the promotion of national independent and controllable strategy, domestic firmware ushered in a good opportunity for development. The company's products have adapted to the domestic mainstream chip brands, and are expected to fully benefit from the wave of "Daxin Chuang". (2) the company is the only independent supplier of X86 architecture BIOS authorized by Intel Corp in mainland China and one of the four in the world, and has significant advantages over other domestic firmware developers. After years of development, the company has formed a strong technology accumulation in the field of BIOS and BMC firmware, and its competitive strength is increasing continuously, and its market share in X86 commercial firmware is expected to continue to increase.
Risk tips: increased market competition; authorization can not be renewed; technology research and development can not meet the market demand.