The company's leading products are various protective devices such as thyristors, MOSFETs, low junction capacitance discharge tubes, etc., power switching transistors, etc. The market share of thyristors is about 37%, but the company's MOSFET business revenue has grown rapidly, and the revenue share has increased to 43% of 3Q22. The company is a leader in the thyristor segment, and the domestic market share of thyristors is about 37%. The quality and stability of the company's products have been recognized by the world's leading brands. Revenue from the power chip and power semiconductor discrete device business has grown rapidly, and the gross margin of the business has remained at a high level. In recent years, with the company's MOSFET products and customers making breakthroughs, MOS business revenue has grown rapidly, and the revenue structure has increased to 43% of 3Q22. Both the company's revenue and net profit have maintained relatively rapid growth. Due to the downturn in downstream consumer electronics and other industries, the company's revenue growth rate declined slightly in the first three quarters of 2022. We believe that as downstream gradually recovers and new production capacity reaches production, the company's performance is expected to maintain relatively rapid growth.
The domestic MOSFET localization rate is 41.3%, while the top ten global manufacturers are foreign manufacturers, and domestic companies are expected to seize import substitution opportunities. Downstream automotive electronics, consumer electronics, and industry account for a relatively high proportion of domestic MOS products, accounting for 25%, 20%, and 20% respectively. According to Yole data, it is estimated that the global MOSFET market will reach 9.5 billion US dollars in 2026, the average compound growth rate in 2020-2026 is 3.8%, and the domestic MOSFET localization rate in 2023 is about 41.3%. The top ten MOSFETs in the world are foreign manufacturers, and domestic manufacturers are expected to seize import substitution opportunities to seize the market.
The company has technical advantages and customer advantages, and has increased capital expenditure to expand production, and is expected to become a leader in MOSFETs across the semiconductor cycle. The company's advanced process technology is fully applied to chip design and manufacturing, finished product packaging, and quality monitoring and inspection production processes, and quality control and efficiency have been greatly improved. The company's products are exported to South Korea, Japan, etc., and the amount of foreign exports is increasing year by year, and customer advantages are prominent. The scale of the company's assets and liabilities has continued to increase with business development. With the investment and construction of the Nantong plant, the balance ratio has increased since 2021. Global semiconductor sales and capital expenditure usually have obvious cyclical characteristics, but we believe that the company has the above competitive advantages and achieved active and efficient production expansion, which is expected to cross the semiconductor cycle and grow into a leading MOSFET company.
We reviewed the development history of ROHM, a leading overseas power semiconductor company, and came to the conclusion that leading domestic IDM manufacturers, especially FAB that can quickly accept a large number of customized products of various categories, and leading companies with integrated sealing and testing technology, such as Jiejie Microelectronics, have obvious advantages in IDM and are expected to occupy a high market share in the next boom cycle. By studying the development history of leading global power semiconductor companies, the development of most giants is deeply tied to their downstream industries and automotive customers. We chose ROHM, a leading global power semiconductor company, to conduct a review study. We believe that domestic MOS downstream is dominated by home appliances and consumer electronics, and that subsequent industrial control and vehicle grade chips and modules with high added value for products are an important breakthrough. Leading domestic IDM manufacturers, especially FAB companies that can quickly accept a large number of customized products in multiple categories and also develop sealing and testing technology, such as Jiejie Microelectronics, are expected to occupy a high market share in the next boom cycle.
Company profit forecast and investment rating: The company is a leading thyristor company and is actively expanding production to increase the share of MOSFET products. We expect the company's net profit to be 381 million yuan, 550 million yuan, and 765 million yuan respectively in 2022-2024. Corresponding to the current stock price PE is 45X, 31X, and 22X respectively, covered for the first time, and given a “recommended” rating.
Risk warning: (1) downstream demand is slowing; (2) production expansion progress does not meet expectations; (3) product price fluctuations.