Leading electronic ceramic products, third-generation semiconductors began a second growth curve and gave a “buy” rating.
Data communication, 5G base station construction, and increased demand for independent and controllable components are the main logic for the growth of the company's electronic ceramics business. Currently, the company is actively promoting the injection of GaN RF chips and SiC power module assets. After the transaction is completed, the company will become the leading and scarce GaN RF chip and SiC power module IDM manufacturer in China. Without considering asset injection, we expect that from 2022 to 2024, the company's net profit to the parent will be 1.64, 2.10, 268 million yuan, and the EPS will be 0.78, 1.01, and 1.28 yuan. The current stock price corresponding to PE from 2022 to 2024 is 123.1, 96.1, and 75.5 times. This is covered for the first time, giving a “buy” rating.
Electronic ceramics: Leading the technology and process industry, providing autonomous and controllable growth impetus The company has mature technology and technology in the field of electronic ceramics, and independently controls the three ceramic systems of 90% alumina ceramics, 95% alumina ceramics, and aluminum nitride. In terms of design, the company has advanced design methods and design software platforms. The construction of 5G communications and the number of data centers around the world have increased dramatically, driving the increase in the use of optical modules, and leading to the steady growth of the optical communication device housing market. Many famous optoelectronic device manufacturers in the world are corporate customers, and communication device cases will grow steadily in the future. The localization of SAW filters is speeding up, and as a leading supplier of ceramic cases for sound meter filters in China, consumer electronics cases are expected to experience rapid growth in the future.
It is proposed to inject high-quality assets to achieve the IDM layout of GaN RF and SiC modules. On September 21, 2022, the company issued a transaction report on the purchase of assets and raising supporting capital (draft) (revised draft). It plans to purchase 100% of the assets and liabilities of the RF chip business of gallium nitride communication base stations, 73% of Bowei's shares, and 94.6029% of the shares of the United Nations League of Nations. After the transaction is completed, Sinocera Electronics will implement the IDM layout of GaN communication RF chips and SiC power modules. The target asset of GaN communication RF chips is one of the few domestic batch suppliers that have achieved technological breakthroughs and large-scale industrialization of RF chips and devices for GaN 5G base stations. Customers cover leading enterprises in the domestic communications industry. For SiC power modules, after the construction of the first stage production line is completed, the target asset will have the overall ability to design, manufacture and package test silicon carbide power modules.
Existing silicon carbide power modules include 650V, 1200V and 1700V series products, which are mainly used in new energy vehicles, industrial power supplies, new energy inverters, etc.
Risk warning: asset injection transaction failure, weak downstream demand, increased competition, risk of raw material price increases, etc.