Summary of the report:
Founded in Shanghai in 2008, Actronic has always focused on the agency and distribution of electronic components, mainly distributing products from international well-known electronic component designers and manufacturers, such as Toshiba, Seoul Semiconductor, Murata, Panasonic, LG and so on.
Demand side: traditional industries are developing steadily and emerging industries are growing rapidly. (1) Global semiconductor sales have maintained growth, and the demand for a wide range of applications of components has increased. The market demand of optoelectronic devices, memory chips and passive components keeps growing at a high speed with the improvement of automobile intelligence. (2) the demand for power management chips in China is growing rapidly. The scale of the global power chip market has maintained growth, with a compound growth rate of 12.3% in 2017-2022 and 7.6% in 2022-2026. (3) the global demand for LED display driver chips keeps growing at a high speed. With the improvement of resolution, the mainstream spacing of the display screen continues to shrink, and the proportion of small-spacing LED display products gradually increases, gradually expanding from terminal application scenes such as security monitoring and command centers and cinemas to conference display terminals and XR virtual photography. It is estimated that the global market for LED display driver chips will reach US $851 million in 2023.
Supply side: international giants dominate, and domestic manufacturers rise rapidly. (1) the sales of electronic components are becoming market-oriented, the industrial chain is shifting inland, and domestic distributors have ushered in the development. In 2019, the top three global electronic components distributors accounted for 73% of the revenue of the top 50 enterprises, and the competition pattern was concentrated.
In recent years, with the gradual development of domestic manufacturers, a number of local electronic components distributors have landed in the A-share capital market. (2) before 2021, the CR3 of the three major power supply IC enterprises accounted for 41%, and the cumulative proportion of domestic enterprises was less than 3%. With the gradual shift of international large manufacturers to vehicle specification grade, industrial grade and military grade, domestic manufacturers ushered in development opportunities.
Growth logic: excellent performance of the distribution business, self-developed chips contribute to the second curve. Compared with the distributors in the industry, the company has a higher gross profit margin than the industry by virtue of its excellent supply chain management ability and excellent customers. With many years of advantages to cut into the self-research IC business, continue to acquire high-quality companies to achieve business integration, the accumulation of core patents, the current mass production of a variety of products, opening up new growth points.
Cover for the first time, giving a "buy" rating. Select Shengbang shares related to simulation business, Xinpenwei, Snape, Runxin Technology and Hua Anxin creation related to distribution business as comparable companies, adopt segment valuation for the company's business, and consider the company's supply chain management capacity, give the company's distribution business 40 times PE in 2023, and self-developed IC has a high growth, giving it 50 times PE,2023 year reasonable valuation of 44 times.
Risk tip: the expansion of new products is not as expected, and the downstream demand is not as expected.