Incidents:
The company released its 2022 annual report. In 2022, it achieved revenue of 1,783 million yuan, an increase of 34.5% over the previous year; net profit of 267 million yuan, a decrease of 39.85% over the previous year; after deducting the impact of share payments, Guimo's net profit was 565 million yuan, a decrease of 3.67% over the previous year.
Comment:
R&D investment increased in '22, and Q4 performance was under marginal pressure: the company's 22-year performance was under pressure. On the one hand, the company continued to increase R&D and technology investment in power supplies, interfaces, MCUs, data converters, and car-grade products during the reporting period. As of the end of 22, the number of technical R&D personnel increased 76.73% year-on-year. The corresponding increase in employee remuneration, R&D consumables, development and testing costs increased. R&D expenses in '22 were 656 million, +117.94% year on year. On the other hand, due to H2 in '22, the R&D expenditure rate was 36.76%, +14.06pct year on year; on the other hand, due to H2 in '22, +14.06pct; on the other hand, due to H2 in '22 The decline in the popularity of terminals such as communications and industry led to a decline in orders. In particular, Q4 revenue declined month-on-month compared to Q3 and the same period last year. Looking at a single quarter, 22Q4 revenue was 315 million yuan, -27.64% year on year, -33.12% month on month; Guimu's net profit loss was 10.14 million yuan, moving from profit to loss on the same period; gross margin for the single quarter was 59.09%, -0.5pct year on year, +0.19pct month-on-month.
Power management chips are growing rapidly, and the product structure is more balanced: during the reporting period, the company's signal chain chips continued to grow steadily, achieving revenue of 1,263 billion yuan, +22.85% over the same period last year. The sales scale of power products such as linear power supplies, power monitoring, and motor drives was further expanded, and power management chip products achieved revenue of 521 million yuan, +74.62% over the same period last year. During the reporting period, the company's signal chain chip revenue accounted for 70.80%, and power management chip revenue accounted for 29.20%. The product structure was more balanced, taking a new step in the development of a platform-based company. In the future, the company will continue to enrich its power supply product line and firmly promote a platform-based business layout.
Vehicle regulations and isolation products form a new growth pole for the company: the company is actively expanding the automotive sector while building on the communications market.
During the reporting period, the company actively participated in the construction of an industry automotive chip standard system, continued to promote the construction and certification of internal vehicle regulation functional safety systems, and released more than 20 automotive grade chips, including high-voltage precision operational amplifiers, ultra-low noise, low dropout LDO, high-current linear regulators, high-performance and high-reliability CAN FD transceivers, high-voltage low-power voltage monitors, etc., and successfully passed AEC-Q100 certification and have been introduced to clients one after another. The company can provide relatively complete automotive grade solutions for analog and power management components. It is expected that future vehicle regulation products will bring a considerable increase in the company's performance.
In terms of isolation products, the company launched various product lines such as digital isolators, isolation interfaces, isolation sampling, and isolation drivers during the reporting period. The isolation voltage resistance level of the isolation products was above 5 kVrms, ESD electrostatic protection reached ±8 kV, and the anti-latch latch up capability was 800 mA (high temperature 125 ℃). Performance and reliability were leading in China; common mode transient suppression CMTI reached 200kV/μs. Among all domestic and foreign isolation products of the same type, the isolator's CMTI capability is in the leading position in the world. After the smooth launch and market introduction of the company's quarantine products in '22, we expect them to be released rapidly in '23.
The industrial chain is extended upward and the testing process is more autonomous and controllable: As chip integration and complexity continue to increase, and downstream application scenarios place more stringent requirements on product quality and reliability, the company plans to build a test center.
The company has issued a fixed increase in fundraising instructions. Of the 3.76 billion yuan it plans to raise, 780 million yuan will be used for the construction of the test center project. Self-built test centers can enhance the company's autonomy and control in wafer testing and finished product testing for its high-end products, enhance the synergies between R&D technology and testing processes, strengthen quality control of the entire chip testing process, and provide strong support for the company's supply chain security, technical secrecy, and R&D iteration.
Profit forecasting, valuation and ratings: The company's power products have made rapid breakthroughs, signal chain products have developed steadily, and the platform-based strategy is beginning to bear fruit. Considering that the boom in the communications, industry and other sectors has not fully recovered, the net profit forecast for 23-24 was lowered from 499/667 million yuan to 432/654 million yuan, the adjustment range was -13%/-2%, and the 25-year forecast (826 million yuan) was increased (826 million yuan). The corresponding PE for 23-25 was 77/51/40X respectively; it is estimated that Fumo's net profit after excluding the impact of share payments in 23 was 582 million yuan, and the corresponding PE was 57X. Although the company's short-term performance is under pressure from downstream sentiment, new products such as digital isolators are progressing smoothly, car-grade business is gradually expanding, and self-built test centers and in-house processes are maturing. We are optimistic about the company's long-term development potential and maintain the “buy” rating.
Risk warning: New product promotion falls short of expectations; industry sentiment continues to be sluggish; risk of trade friction.