Signal chain faucet + power management + embedded three-wheel drive, plus car gauge / isolation into a new stage:
Founded in 2012, Snape is a domestic leader in signal chain products, continuously expanding power management, MCU, AFE, etc., highlighting the platform layout, has been able to provide more than 1600 products, has more than 3700 customers, and the customer base has also entered the process of quantitative change to qualitative change. We are optimistic about the company: 1) lead in the field of signal chain and expand power management and embedded products to highlight the platform layout and drive performance growth; 2) focus on high barrier tracks such as communications, industry and automobiles, which are less affected by the macro decline. Linear products are the main products, contributing about 55% of the revenue of signal chain products in 2022; among power products, linear power supply is the main product, contributing about 85% of the revenue of power products. In 2022, the company's income was 1.78 billion yuan (year-on-year + 34.5%), and the net profit was 267 million yuan (- 40% year-on-year).
The simulation localization rate is low, and the company's category expansion effect is remarkable: according to Frost&Sullivan 's forecast, China's analog IC market is expected to reach 334 billion yuan in 2025, with an average compound growth rate of 5.89% from 2016 to 2025. According to the China Semiconductor Association, the self-sufficiency rate of Chinese analog chips in 2021 is only 12%. Trapp is one of the few analog chip manufacturers in China that are good at signal chain chips and cover both signal chain and power management chips. The effect of category expansion is remarkable. Linear products are the largest source of income and the most technologically advanced product line of Trapp. Compared with domestic and foreign competitors in terms of low power consumption and high precision, the performance of operational amplifiers is in a leading position. LDO linear power is the second largest source of revenue. According to institutional research information disclosed by the company, it is estimated that linear products, converters, interfaces, and LDO linear power products will contribute 39%, 14%, 18% and 25% of revenue respectively in 2022.
Focusing on the middle and high end of the market is expected to maintain robust profitability and high growth: the low end of the market is the hardest hit of the price war, and the gross profit margin of domestic manufacturers focused on the consumer market fell significantly in 2022. Trapp's gross profit margin is still the same as in 2021. At the same time, compared with the slowing down of the consumer electronics market, there is still a broad market space for communications, industry and automobiles downstream. 1. Communication: benefiting from the rapid growth of server and optical communication market brought by global 5G base station construction and AI application innovation, the demand for analog chips in communication field is high. 2: the use scenes of complex and changeable equipment in the security monitoring industry, industrial instruments and instruments are all the technical expertise of Snape. 3: at present, the localization rate of analog chips in cars is low, and due to the trend of automation and electrification, the penetration rate of domestic independent chip supply is expected to continue to accelerate, while the research and development of Snape car specification-grade products has been steadily advanced, and more than 20 car gauge chips have been released.
Profit forecast and investment rating: the company is the leader of the domestic signal chain, product performance is in a leading position, at the same time, the company power supply analog chips start faster. We expect the company's 2023-2025 net profit to be RMB 1.52 million, which is covered for the first time and given a "buy" rating.
Risk tips: lower-than-expected demand, intensified competition in the industry, and the loss of key technical personnel.