Revenue increased 14.7% year over year in 2022, and gross margin was under pressure. The company's revenue in 2022 was 2,914 million yuan (YoY +14.69%), net profit of 688 million yuan (YoY +14.57%), after deducting net profit of 557 million yuan (YoY -4.70%). 1Q23 revenue was 632 million yuan (YoY -16.40%, QoQ -0.55%), net profit of the mother was 34.44 million yuan (YoY -85.53%, QoQ -25.77%), after deducting net profit of 23.49 million yuan (YoY -89.94%, QoQ +256%). In terms of profitability, gross margin fell by 4.0pct to 40.90% in 2022, the R&D fee rate increased by 0.3pct to 9.33%, the management fee rate increased by 0.7pct to 3.45%, and the sales rate decreased by 0.1pct to 0.57%. Gross margin declined quarterly in 2022, with 1Q23 being 29.67% (YOY-20.6pct, QoQ +0.3pct), mainly due to declining capacity utilization and rising 12-inch silicon wafer production capacity.
The gross margin of semiconductor silicon wafers dropped by 11 pct in 2022 through mergers and acquisitions to strengthen the semiconductor light-doped silicon wafer layout.
In 2022, the company's semiconductor silicon wafer business achieved revenue of 1,746 billion yuan (YoY +19.73%), accounting for 60%, and gross profit margin of 34.18% (-11.3pct). On the basis of maintaining the market advantage of 6-inch and 8-inch silicon wafers, the company completed the layout of reprocessing 12-inch semiconductor wafers and light-mixing technology through mergers and acquisitions of high-quality targets. Currently, the technical capabilities of 12-inch semiconductor silicon wafers cover the logic circuits and storage circuits of technology nodes above 14nm, as well as image sensor devices and power devices for technology nodes required by customers.
The product layout was increased around photovoltaics and vehicle regulations, and the gross margin of semiconductor power devices reached 56%. In 2022, the company's semiconductor power device business achieved revenue of 1,078 million yuan (YoY +7.10%), accounting for 37%, and gross profit margin of 56.31% (+5.36pct). Focusing on the two major product categories of photovoltaics and automotive regulations, the company prioritizes expanding the sales scale and proportion of groove products, steadily increasing the share of production and sales of FRD products, and speeding up the development of IGBT and other products.
Among them, photovoltaic products grew at a high level, accounting for 45-49% of global photovoltaic chip sales throughout the year; grooved chip shipments increased dramatically, up 86% year on year; FRD products increased steadily, with an increase of 400%; and IGBT products successfully completed technology development and began client-side verification.
RF chip products and customers are advancing smoothly, passing vehicle regulations and quality system certification and shipping in batches. In 2022, the company's compound semiconductor RF chip business achieved revenue of 50.68 million yuan (YoY +14.90%), accounting for 2%, and gross profit margin of -50.23% (+43.54pct). The company realized the application of InGap HBT technology in 5G mobile terminals and WiFi wireless networks, developed the world's advanced double 0.15 micron GaAs PhEMT process technology; passed the IATF16949 vehicle regulation quality system certification, and achieved batch shipping.
Investment advice: The company's short-term profits are under pressure to maintain the “increase in holdings” rating. We expect the company's net profit to the mother in 2023-2025 is 613/889/1,189 million yuan, with a year-on-year growth rate of -10.9/+45.1/ +33.7%; EPS is 0.90/1.31/1.76 yuan, and PE corresponding to the stock price on April 21, 2023 is 63/43/32x, respectively. Short-term profits are under pressure to maintain the “increase holdings” rating.
Risk warning: production capacity release falls short of expectations; customer verification falls short of expectations; downstream demand falls short of expectations.