Huizhiwei: domestic smartphone and Internet of things RF front-end chip leader Huizhiwei focuses on the design and development of RF front-end chips, with a full set of RF front-end chip design capabilities and integrated module research and development capabilities. the products have completely covered the mainstream communication frequency band and are widely used in smart phones and the Internet of things and other fields. The company has expanded its customers, including Samsung, OPPO and other domestic and foreign well-known smartphone brands, as well as Wentai Technology, Huaqin Communications and other first-line mobile terminal equipment ODM manufacturers. The company is expected to seize the opportunity of localization of 5G RF front-end modules, constantly improve the product layout of L-PAMiF, L-PAMiD and other highly integrated modules, and achieve a continuous increase in the customer supply chain share of the head mobile phone brand. It is expected that in 2023-24-25, the company will achieve revenue of 6.03 24PS 11.11 billion yuan, with reference to comparable companies 8.31 times 24PS, considering that the company is still in the growth stage, but the head customer coverage is already wide, and some products are expected to enter the stage of introduction from customers to large-scale volume in 23 years, giving 10 times 24PS, corresponding to the target price of 24.5 yuan, and giving the "buy" rating for the first time.
RF front-end product layout is perfect, share still has a large improvement space company in the RF front-end field has formed a perfect product matrix, in 2020, the first in China to launch 5G new frequency band L-PAMiF products and achieve large-scale sales, 2022 release of low-frequency L-PAMiD products, medium and high frequency L-PAMiD products will also be launched one after another, 5G module layout perfection. According to TSR, the company's L-PAMiF product shipments accounted for 1.95% of the global market share in 2021, and the company's mobile phone RF product sales accounted for less than 1% of the global market in 2022, which still has a lot of room for improvement. The reconfigurable hardware architecture based on "insulating silicon + gallium arsenide" independently developed by the company can effectively improve RF performance, achieve cost optimization, shorten the product development cycle, and help the company to make a breakthrough in the white-hot competition.
Deeply ploughing the head customer resources, 4G/5G RF front-end modules of two-wheel drive company in the field of smart phones and Internet of things are widely used in the two major fields of smart phones and Internet of things, and cooperative customers include domestic and foreign well-known smartphone brands such as Samsung, OPPO, VIVO, Glory, ODM manufacturers of first-line mobile terminal equipment such as Wentai Technology and Huaqin Communications, and head wireless communication module manufacturers such as Mobile Communications, Guanghetong and Nikhai Intelligence. Among them, the company's RF front-end module has achieved mass production in Samsung's global best-selling series of A225G mobile phones, laying the foundation for further building a cooperative relationship and expanding more customer resources. With the further improvement of 5G penetration and localization rate, and the massive demand for RF front-end generated by the Internet of everything, the company is expected to continue to gain sufficient growth momentum.
Investment suggestion: the target price is 24.5 yuan, based on 10 times 2024 PS high-end RF front-end chip domestic alternative space is broad, the company continues to expand product layout, promote process technology upgrading iteration, is expected to achieve mass production in more brand customers. We estimate that the annual revenue of the company in 2023-24-25 will be 6.03 24PS 11.11 billion yuan, with reference to the comparable company 8.31 times 24PS, considering that the company's head customer coverage is already wide, some products are about to be released and have high growth, and the company is given a "buy" rating corresponding to the target price of 24.50 yuan.
Risk tips: downstream demand recovery is slow, market competition intensifies, technology upgrading iteration is not as expected.