Incident: The company released its 2022 annual report. The company achieved operating income of 1,824 million yuan, an increase of 2.86% over the previous year, and achieved net profit of 359 million yuan, a year-on-year decrease of 27.68%, after deducting net profit of 300 million yuan from non-return mothers, a year-on-year decrease of 34.54%.
The product structure continues to be optimized to expand downstream key areas: at the beginning of listing, the company's main revenue came from thyristor products. During the reporting period, while ensuring the steady growth of the thyristor business, the company increased the proportion of products such as protective devices, MOSFETs, and IGBTs, gradually matching the company's product structure with the industry structure. In recent years, the automotive electronics, 5G communication, photovoltaic and energy storage industries have developed rapidly. The company will vigorously develop related products that match key downstream areas, actively expand the product range of car-grade power semiconductor protection devices, actively lay out unique FRD and high-end rectifier product lines, accelerate the development and promotion of novel power semiconductor devices such as power MOSFETs, IGBTs, silicon carbide, gallium nitride, etc., and enter simultaneously from advanced packaging and chip design, and quickly enter new energy vehicle electronics, 5G core communication power modules, smart wearables, smart wearables, etc. Surveillance, photovoltaics, objects Continuously optimize product structures in fields such as networking, industrial control and consumer electronics.
Focusing on the MOSFET and IGBT fields, the company is expected to become a new growth point for the company: the company has become a domestic leader in the field of thyristors, second only to STMicroelectronics in terms of market share, and is the second largest manufacturer in the world. Judging from the market share of power devices, the market size of MOSFETs and IGBTs has more market space, and product profit levels are also higher. Currently, domestic power MOSFETs and IGBTs are still mainly imported. In this context, the company quickly initiated and implemented fixed increase projects to lay out power MOSFETs and IGBTs. According to the announcement, in March 2020, the company reached a strategic cooperation agreement with SMIC Manufacturing (Shaoxing), which is mainly responsible for the design, testing and product promotion of MOSFET-related products. Some of its businesses are equivalent to Fabless's model. Among them, the company's MOS division in the Wuxi Sensor Industrial Park focuses on the design and development of VD MOS and TRENCH MOS; Jiejie Microelectronics (Shanghai) Technology Co., Ltd. mainly designs and develops SGT MOS. On the customer side, the company's MOSFET customers overlap with thyristor customers, so it has a good customer base. In the future, the development and breakthrough progress of the company's MOS vehicle standards is expected to become a new growth point for the company.
Investment advice: We expect the company's revenue from 2023 to 2025 to 2,589 million yuan, 3.47 billion yuan, and 4.615 billion yuan respectively, and net profit of 481 million yuan, 651 million yuan, and 929 million yuan respectively. We will give 35x PE in 2023, with a target price of 22.84, and maintain the “buy-A” investment rating.
Risk warning: Product development falls short of expectations; industry sentiment falls short of expectations; customer expansion falls short of expectations.