The company's 1Q23 revenue increased 7.82% year on year, and profit levels were under pressure in the short term. In '22, the company achieved revenue of 1,823 million yuan (YoY +2.86%), net profit of 359 million yuan (YoY -27.68%), net profit of 300 million yuan (YoY -34.54%) after deducting net profit of non-return to the mother (YoY -34.54%), and gross profit margin of 40.4% (YOY-7.29PCT). 1Q23 achieved revenue of 403 million yuan in a single quarter (YoY +7.82%, QoQ -25.1%), net profit of 32 million yuan (YoY -68.4%, QoQ -51.8%), net profit of 27 million yuan after deducting non-return to the mother (YoY -69.03%, QoQ -53.4%), gross profit margin of 34.86% (YOY-15.03pct, QoQ+0.97PCT).
Thyristors and protective devices remain leading the way, and a recovery in demand is expected to restore profitability. The company's main products include thyristors and protective devices. The revenue of thyristors (chip+devices) in '22 was 405 million yuan, accounting for 22.47%, and the corresponding gross margin was 44.12%; the revenue of protective devices (chip+devices) was 595 million yuan, accounting for 33.03%, and the corresponding gross margin was 45.83%. Since thyristors and protective devices are mainly used in the fields of white appliances, small household appliances, omission insurance, lighting, security, communications, electricity meters, automotive electronics, photovoltaics, power tools, and motorcycle parts, the current consumer market weakness affects the decline in production line utilization, and stock business is under pressure in stages. It is expected that demand for thyristors and protective devices will gradually recover as the consumer market recovers.
MOSFET continues to grow, and testing services are being upgraded simultaneously. MOSFET (chip+device) revenue in '22 was 802 million yuan. The business share increased from 33% in '21 to 44.5%, with a gross margin of 32.99%. Currently, the company's “High-end Power Semiconductor Device Industrialization Project” produces about 25,000 pieces per month. It is estimated that it will reach 50,000 pieces/month after delivery. If the second phase of the project is superimposed, the total production capacity will be about 75,000 pieces/month in the future. Currently, the project is in a climbing period, and it is expected that if capacity utilization increases within 23 years, the production line is expected to reach a loss-loss balance. On this basis, the company's power semiconductor “vehicle grade” testing project is in the construction stage. In the future, after delivery, it can achieve an annual output of 1900 kk car-grade high-power device DFN products, 120kk car-grade high-power device TOLL products, 90kk car-grade high-power device LFPACK products, and 60kkwCSP power device products.
R&D investment continues to grow to rapidly optimize product structures and manufacturing resources. The company continued to increase R&D investment, which increased 61% year-on-year in '22. In the future, the company will lay out characteristic FRD and high-end rectifier product lines to expand applications in the fields of new energy vehicles, photovoltaics, wind power, electric welders, various variable frequency power supplies, etc.; in the MOSFET field, focus on key core technologies such as Trench, SGT, Super Junction, and ultra-high voltage PlanarMOSFET to go deep into 5G, automotive electronics, photovoltaics, the Internet of Things, industrial control and intelligent electronics; in addition, it will expand in multiple directions in fields such as small plane signal devices and optoelectronic devices.
Investment advice: We expect the company's MOSFET expansion and consumption recovery to inject momentum into increased profitability. We expect the company to achieve net profit of 406/503/663 million yuan in 23-25 (YoY +13%/24%/32%), corresponding to PE in 23-25, 35/28/21 times respectively, maintaining the “buy” rating.
Risk warning: demand for new energy vehicles falls short of expectations, production line construction falls short of expectations, etc.