Profits are under pressure in 2022, pay attention to the progress of the company's MCU and new vehicle regulations products
SRP's 2022 revenue was 1.78 billion yuan, YoY +34.5%; net profit of the mother was 270 million yuan, YoY - 39.9%, excluding share payments, the net profit of the mother was 570 million yuan, YoY -3.7%, and the company's gross margin fell to 58.6%, mainly due to 1) demand falling short of expectations; 2) increased competition and increased power management share. 4Q achieved revenue of 3.1 billion yuan (YoY -27.6%, QoQ -33.1%), net profit attributable to the mother in a single quarter was -0.1 billion yuan (YoY -107.7%, QoQ -124.2%), and gross margin fell slightly to 59.1% compared to the same period in '21. The 4Q company's inventory was 290 million yuan, +46.2% over the previous month. Looking ahead to 2023, we expect the industry to remove inventory or continue until 2Q23. It is recommended to keep an eye on the company's vehicle regulations and the progress of new energy products. We raised the net profit forecast for 23-24 to 47/72 million yuan, and the estimated net profit for 25 years was 93 million yuan.
Considering that the industry may start recovering in 2H23 and the company's new product release, 55.4x 24PE (industry average value 49.5 x 24PE) was given, with a target price of 331.9 yuan to maintain purchases.
Signal chain+power management The two-wheel drive pattern is consolidated, and the 4Q gross margin is relatively strong
In 2022, the company continued to increase R&D and technical investment in products such as power supplies, interfaces, MCUs, data converters, etc., and car-grade products. The number of R&D personnel increased to 486, +76.7% over the same period last year. In 2022, the company's signal chain chip revenue was 1.26 billion yuan (YOY +22.9%), accounting for 70.8% of revenue, 62.2% year-on-year, -1.2pct, power management chip revenue of 5.2 billion yuan (YOY +74.6%), 29.2% of revenue, gross margin of 49.8%, year-on-year -0.6pct. The revenue structure was more balanced, and the two-wheel drive business pattern was further consolidated. The company's 4Q gross margin remained strong, reaching 59.1%, +0.2pct month-on-month and -0.5pct year-on-year, mainly due to the company's cost reduction and efficiency. The 4Q company's inventory level increased by 90 million yuan to 290 million yuan over the previous month, but with the company's inventory control and the slow recovery in downstream demand, 23Q1 inventory may begin to decline.
Looking ahead to 2023: New vehicle regulation products are progressing smoothly. The current demand for signal chain+power management+MCU platform-based layout is slowly recovering, and downstream deconstruction continues. We believe that 1) Overseas communications will be the company's growth point for 23 years, and the server company's products have already entered the development and mass production stage; 2) the company has released more than 20 vehicle regulation chips, which have passed AEC-Q100 certification one after another, and have been introduced to clients one after another, including high-voltage precision operational amplifiers, ultra-low noise, low dropout, high-current linear regulators, CAN, etc.; 3) The company's first MCU product has completed TO, and risk mass production will be achieved in 23. Under the downturn in the industry cycle, fierce competition, and changes in product structure, the company's cost reduction and efficiency measures are expected to offset some of the price side pressure. In the long term, we are optimistic that the company's signal chain+power management dual-wheel drive will start a new growth curve for embedded processors.
Maintain the “buy” rating and maintain the target price of 331.9 yuan
Optimistic about the company's cost reduction and efficiency offset some of the price reduction pressure. The net profit forecast for 23-24 was adjusted to 47/72 million yuan (previous value: 39/640 million yuan), and net profit for 25 is expected to be 930 million yuan. Considering that the industry may begin to pick up in 2H23 and the growth potential of the company's new product releases, 55.4x 24PE (industry average value 49.5 x 24PE) was given, with a target price of 331.9 yuan to maintain purchases.
Risk warning: The risk of concentrating OEM production capacity is too high; risk of a semiconductor downturn cycle.