Company profile: power management + signal chain, build platform simulation manufacturer. Diao Micro was founded in 2010, the company's products are mainly divided into power management analog chips and signal chain analog chips and two series. At present, the company's analog chip model has reached more than 1400 models, 2022 sales of more than 1 billion. The company's power management products and signal chain products go hand in hand, and the gross profit margin is growing steadily. In 2021, the gross profit margin of power management and signal chain products will reach 57% and 50% respectively. The company's profits continued to increase, reversed losses and grew rapidly in 2019. In the first three quarters of 2022, the company's net profit was 161 million yuan, + 43% compared with the same period last year, corresponding to a net interest rate of 40%, showing a good profit level.
Industry pattern: the market scale is broad and the substitution space is huge. The size of the global analog chip market increased from US $40.1 billion in 2013 to US $61.2 billion in 2021, with CAGR of 5.4%, of which Chinese mainland accounted for 36%, which is the main demand market. In 2021, the top 10 analog chip manufacturers in the world are all foreign manufacturers, accounting for 68% of the total. The vast domestic market demand and the competitive pattern of foreign leaders make the self-sufficiency rate of analog chips in our country at a low level. In 2020, the self-sufficiency rate of analog chips in our country is 12%, and there is a huge space for domestic manufacturers to replace. At present, domestic simulation manufacturers are making continuous efforts to adopt the strategy of "differentiation" in order to make a difference.
Company business: the layout of consumer electronics is complete, and the field of automobile / server is in the ascendant. (1) in the consumer field represented by smartphones, the company's high-performance analog switch products have a high market position, with a market share of 0.66% in the global analog interface market, ranking 10th in the world. Company Type C analog switch product DIO4480 with excellent performance, successfully entered the new flagship byte jump Pico4/Pico4Pro. From the customer level, XIAOMI and OPPO are not only the world's leading smartphone terminal manufacturers, but also the company's shareholders and downstream important customers. Triple identities contribute to the rapid development of the company's consumer electronics business. In addition to related customers, the company gradually expand Qualcomm Inc, Samsung and other international quality customers, expand the customer matrix. (2) in the automotive field, the company expects that the 23-year investment of vehicle regulation products will exceed 50%. Product layout is carried out from the three major directions of signal chain, power products and lighting. The company's signal chain operational amplifier products will be used in various power domains of the intelligent cockpit; power class LDO will be used in general automotive fields such as instrument dial, intelligent cockpit, etc., motor drivers will be used in wipers, rearview mirrors, etc.; and the company's lighting products have mature technical experience, and will be used in product directions such as highly integrated linear current stabilized lighting controllers for automobile taillights in the future. (3) in the server field, 36V voltage withstand voltage and ADC devices are the key applications. In the server field, the company will continue to upgrade the existing product line of high-precision operational amplifiers and expand the high-voltage 36V high-precision product line, from the current 26V operational amplifier for medium and small current detection to the high-precision operational amplifier for ultra-high current (36V/15A) detection, and to develop precision ADC devices with low power consumption and fast conversion of 16ram 18-bit SAR architecture.
Investment suggestion: the company has outstanding technical capability in the field of power management chip research and development, voltage conversion products and intelligent lighting have been introduced into the field of new energy vehicles, and related vehicle regulation products are expected to gradually achieve volume in 23 years. In the signal chain business, the company's products import Samsung, Qualcomm Inc and other international well-known customers, Type-C analog switch products into the byte jump flagship Pico4/Pico4 Pro, the future is expected to benefit from the recovery of consumer electronics and the volume of AR/VR. From 2022 to 2024, we expect the company to achieve revenue of $50,000,81max and net profit of $17,000,000 / 370 million, which corresponds to the pre-PE valuation of 56-39-27. Cover for the first time, giving a "buy" rating.
Risk tips: customer concentration risk, industry competition aggravating risk, downstream demand weakening risk, new product introduction less than expected risk.