Key points of investment

This Friday (April 21), “SMIC Integrated”, a company listed on the Science and Technology Innovation Board, asked for a quote.

SMIC (688469): The company is mainly engaged in wafer foundry and package testing in the fields of MEMS and power devices. The company achieved operating income of 739 million yuan/2,024 million yuan/4.606 billion yuan respectively in 2020 and 2022, YOY was 174.00%/173.82%/127.59%, and the three-year compound annual revenue growth rate was 157.51%; achieving net profit of 1,366 million yuan/-1,236 million yuan/-1,088 million yuan, YOY was -76.94%/9.54%/11.92% in that order.

Investment highlights: 1. The company is a leading specialty process foundry in China, focusing on the manufacture of MEMS and power devices. It is the largest and most technologically advanced MEMS foundry in China. 1) The company is the largest and most technologically advanced MEMS foundry in China. According to the ranking of CDI consultants, in 2020, the company ranked first among MEMS foundries in mainland China in terms of the four dimensions of revenue, brand, production, and product. In 2022, the company's annual MEMS sales volume exceeded 70,400 pieces. The company now has four major MEMS process platforms for microphone sensors, inertial sensors, RF devices, and pressure sensors. At the same time, it has developed standardized manufacturing processes for mainstream applications, with a complete process layout; during the reporting period, the company undertook 5 major national projects and 2 provincial scientific research projects. 2) The company has now become one of the few domestic wafer foundry companies with car-grade IGBT chip production capacity. It can provide 750V to 1,200V high-density advanced IGBTs and advanced main drive inverter modules for electronic control systems of new energy vehicles. During the reporting period, the share of revenue from automotive electronics increased from 0.05% in 2020 to 23.75% in 2022, and the corresponding revenue share of 22Q4 increased to 40%. 2. The company was jointly established by SMIC and Shaoxing Local Capital. The company was established as a joint venture between Shaoxing Yuecheng District Integrated Circuit Industry Fund (Yuecheng Fund) and SMIC Holdings in 2018. Among them, Yuecheng Fund is a joint venture between SMIC Technology and Shaoxing Local Capital. Currently, Yuecheng Fund and SMIC Holdings own 22.70% and 19.57% of the company's shares respectively, and are the company's first and second largest shareholders. The company has received good support from SMIC in terms of technology and personnel. 573 patents and 31 non-patented technologies related to MEMS and power devices are all authorized by SMIC. Company directors Zhao Qi, Tang Tianshen, Liu Xuanjie, Li Xuwu, senior deputy general manager Xiao Fang, and deputy general manager Zhang Xia and Yan Fei are all from SMIC. 3. The company continues to expand production capacity. Both major fund-raising projects have been built ahead of schedule and mass production have been achieved. It is estimated that the company's 8-inch wafer production capacity will reach 170,000 pieces/month in 23. According to the prospectus, the company's fund-raising projects include the “MEMS and Power Device Chip Manufacturing and Packaging Test Production Base Technological Transformation Project” and the “Phase II Wafer Manufacturing Project”. Among them, the “MEMS and Power Device Chip Manufacturing and Packaging Test Production Base Technological Transformation Project” plans to expand production capacity from 42,500 pieces per month to 100,000 wafers per month. The “Phase II Wafer Manufacturing Project” is implemented by the subsidiary Zhongshan Yuezhou, and is planned to be built in 70,000 wafers per month The 8-inch wafer production line for chips, the The project was mass-produced in October 2022, and the company expects to reach production in 2023.

Comparison of listed companies in the same industry: China Resources Micro, Silan Wei, and HuaWei Electronics were selected as comparable listed companies based on market demand, main business, product composition and similarity in application fields. Judging from the comparable companies mentioned above, the average revenue scale of the industry in 2022 was 6.794 billion yuan, the comparable PE-TTM (arithmetic average) was 54.82X, and the gross sales margin was 28.99%; in comparison, the company's revenue scale and gross sales margin were lower than the industry average.

Risk warning: There is still a possibility that companies that have begun the inquiry process will not be able to go public due to special reasons; company content is mainly based on the content of prospectus and other public information; there is a risk that the selection of listed companies in the same industry is not accurate enough; there may be interpretation deviations in the selection of content data. The specific risks of listed companies are shown in the text.