Market space of more than 120 billion yuan
In 2008, the global flash memory product market exceeded 120 billion yuan, and the related market size of flash memory application products exceeded 100 billion US dollars. Flash memory applications have expanded to many fields such as information technology, consumer electronics, and industrial control, and Lanco's patent licensing revenue is estimated at 882 million yuan.
Patent licensing revenue is expected to grow at an average annual rate of 30% from 2009 to 12
With its strong R&D platform and unique patent operation model, gross patent licensing profit contributed 49% of the company's gross profit in 2009. As Lanco's financial strength increases, the degree of defending power will increase greatly. It is estimated that the average annual compound growth rate of patent licensing revenue from 2009 to 2012 will be 30%.
Product sales revenue is expected to grow at an average annual rate of 37.8% from 2009 to 2012
Lanco accounts for 16.45% and 4.93% of the domestic flash drives and mobile hard drives, respectively, accounting for more than 35% of the high-end market share of domestic flash drives. We expect that through the expansion and strengthening of the marketing network, Lanco's product sales revenue will reach 574 million yuan by the end of 2012, an average annual increase of 37.8%. The company's comprehensive gross margin level remained above 26%, and the company's profit was continuously refreshed.
Risk warning
There are risks such as high uncertainty about patent licensing revenue; cyclical changes in the industry and industry competition may have a negative impact on the company's gross margin.
Reasonable valuation range 40.90~49.09 yuan/share
We expect the company's EPS to be 0.61 yuan, 0.84 yuan, and 1.19 yuan respectively from 2009 to 11, with a compound annual growth rate of 39.69%. We believe that the reasonable value range of the company's stock is 40.90 to 49.09 yuan, corresponding to 67.1 to 80.6 times PE in 2009 (after dilution), and 48.69 to 58.44 times PE in 2010.
