Summary of the report:
Medium and Micro Semiconductor was established in Shenzhen on June 22, 2001. Since its establishment, it has always focused on the research, development, design and sales of digital-analog mixed-signal chips and analog chips. Its products are widely used in home appliance control, consumer electronics and other fields.
Demand: MCU demand continues to grow, and China's growth rate exceeds the global growth rate. Automotive electronics accounts for the highest proportion of downstream applications of MCU worldwide, while China is concentrated in the consumer sector. The data show that the compound growth rate is expected to reach 6.19% from 2021 to 2024, and China's compound growth rate from 2020 to 2022 is about 9.0%, which is higher than the global growth rate. In the field of automotive electronics, the MCU market in the field of automotive electronics in China will maintain a growth rate of about 4%. In the field of home appliances, the sales of traditional large household appliances rebounded slightly, the improvement of intelligence led to the improvement of value, and the demand for MCU increased. Sales of small household appliances narrowed slightly, and diversified demand led to an increase in MCU demand. In the field of brushless motors and power batteries, the Chinese market has maintained steady growth.
Supply: the global MCU competition pattern is relatively concentrated, with European, American and Japanese enterprises occupying the main position. In terms of market share, European and American companies such as NXP, microchip, Renesas, ST and Infineon CR5 account for 82 per cent. In the field of car regulations, the localization rate in the field of large household appliances is still low, the main manufacturers are European and American enterprises, in the field of small household appliances, domestic manufacturers begin to have a certain scale.
Growth logic: domestic replacement of large household appliances, high-end automobile MCU chip power. In the field of large household appliances, the market share of foreign brands is still relatively high, and the market share of domestic manufacturers is generally low. with the increase of investment in automobile and other fields by Japanese, South Korean, European and American manufacturers, domestic manufacturers have more room for substitution. In the field of small household appliances, the product iteration cycle is fast, the products of domestic manufacturers are relatively mature, and geographical advantages are easier to meet customer needs more quickly. The automobile field continues to increase investment, the products continue to iterate, and the customer introduction is smooth. In the first half of 2022, the sales of nearly 10 products of the company's BAT32 series used in the automobile front loading market have increased significantly, and the products have been introduced into Changan, BYD, Guangzhou Automobile, Geely and other automobile terminal customers. The company's battery management chip is widely used in motorcycles.
Cover for the first time, give "overweight" rating: due to the influence of the epidemic in 2022, the demand in the field of downstream small household appliances is relatively weak, and the company's performance has been greatly affected for the time being. With the future industry recovery, we estimate that the company's revenue from 2022 to 2024 will be 6.83 billion yuan, respectively. Zhaoyi Innovation, Zhongying Electronics, Xinhai Technology and Hengxuan Technology are selected as comparable companies, with an average PE of 27 times in 2023. The company's PE is 33 times higher than the average.
Risk hint: downstream demand is lower than expected, and the company's product expansion is not as expected.
