The company's CPU kernel is completely autonomous and controllable, and it can be replaced by localization in the sense of underlying architecture. Based on M*Core instruction set and prospective layout of PowerPC and RISC-V instruction set, the company realizes the complete "autonomy, security and controllability" of the underlying technology and architecture of embedded CPU chip IP, fundamentally ensures the company's long-term core technology competitiveness, ensures information security and independence in major national demand areas, and builds a moat for independent controllable chips.
The company car regulation MCU chip localization market space is huge, the car regulation product accelerates the volume. Nearly 95% of the global MCU market is dominated by the US, Europe and Japan chip giants, while Chinese companies supply less than 5%. With the rise of domestic new energy brands, the automotive electronics supply pattern in the fuel car era is expected to be reshaped, and domestic MCU manufacturers usher in an once-in-a-lifetime period of supply chain introduction. The company has achieved serialized layout in 12 product lines of automotive electronic chips, including body control, powertrain, domain controller, on-line chassis, new energy battery BMS, vehicle gauge safety chip, active noise reduction SoC, etc., performance alignment NXP, fully covering all fields of automotive electronics. The company has successfully broken into a number of Tier1 suppliers and vehicle supply chain, and has close cooperation with more than a dozen automotive manufacturers, such as BYD, SAIC, Geely and XPeng Inc.. At present, there are more than 50 customers developing application products based on the company's automotive electronic chips. As of 2023H1, the company's automotive electronics and industrial control business has completed 48 million orders, 73 million in-hand orders, 13 modules in mass production, and 56 Design-in modules. With the end of chip inventory elimination in the 2023H2 vehicle factory, the release of MCU chips in the company's vehicle regulations is expected to accelerate in the second half of the year.
The orders of AI and edge computing business increased greatly, and the domestic RAID control chip made a breakthrough from 0 to 1. As of 2023H1, the company's marginal computing and artificial intelligence business has completed 111 million orders and 413 million in hand, compared with only 121 million of annual revenue in 2022. 2023H2 is expected to maintain high growth and become an important supporting point for the company's performance in the second half of the year. In addition, the company's forward-looking layout of RAID memory control chips has achieved a breakthrough in domestic RAID chip products from 0 to 1, which can be used by top international manufacturers such as Standard Broadcom, with a unit price of 1000-4000 yuan and a gross profit margin of more than 50%, creating an important growth pole for the company in the future.
The trend of hardware and autonomy of information security products is clear, and the company's cloud security chip products are in the lead in China. Security hardware is the largest market segment of the information security industry, the end customers are mainly the government and state-owned enterprises, and there is a strong demand for independent control. The company's cloud security chip is leading in China, and the main customers are convinced, Principal Century, Geer Software and State Grid, etc. The company's products have been adapted to all kinds of domestic CPU motherboards such as Kunpeng, Longxin, Zhaoxin and Feiteng, and have now entered the procurement list of Xinchuang issued by the state. In the future, with the release of domestic main chips such as Kunpeng and Godson, the future potential of the company's cloud security chip is expected.
Cover for the first time, giving a "buy" rating. At present, the market share of China's domestic car regulation MCU is less than 5%, and the company's car regulation MCU is expected to become a domestic leader, and the domestic alternative space is huge; at the same time, the company's cloud security chip has a strong demand for independent controllability, and the company's RAID memory control chip breaks Broadcom Ltd's monopoly to achieve a domestic breakthrough from 0 to 1, with great growth potential in the future. From 2023 to 2025, we estimate that the revenue of the company will be 15.36 / 2.37 billion yuan, the annual growth rate will be 61.48%, 81.18%, 54.36%, the net profit will be 0.60, 1.31 / 291 million yuan, and the annual growth rate will be-22.26%, 119.06%, 121.95, 0.87, respectively. The PE corresponding to the current market capitalization is 163.29, 74.54, 33.59 times, respectively, with a "buy" rating.
Risk hint: the penetration rate of new energy vehicles is lower than the expected risk; market competition aggravates the risk; R & D is less than expected risk.