Events:
The company released its three-quarter report in 2023, with operating income of 7.53 billion yuan in the first three quarters, an increase of-1.33% over the same period last year, and a net profit of 1.056 billion, an increase of-48.66% over the same period last year. The operating income in the third quarter was 2.5 billion yuan, an increase of 0.57% over the same period last year, and the net profit was 278 million yuan, an increase of-60.4% over the same period last year.
Affected by the cycle of the semiconductor industry, the company's performance is under short-term pressure:
In the first half of 2023, the domestic semiconductor market was affected periodically, and the end market in consumer areas such as smartphones and PC was weak. according to the World Semiconductor Trade Statistics Organization (WSTS), the global semiconductor market will decline by 10.3% in 2023, reaching about US $515.1 billion, but it is expected to grow by 11.8% to about US $576 billion in 2024. Affected by the cycle of the semiconductor industry, the company's performance is under short-term pressure. According to the third quarterly report, the company achieved operating income of 7.53 billion yuan in the first three quarters, an increase of-1.33% over the same period last year, and a net profit of 1.056 billion, an increase of-48.66% over the same period last year. The operating income in the third quarter was 2.5 billion yuan, an increase of 0.57% over the same period last year, and the net profit was 278 million yuan, an increase of-60.4% over the same period last year. But the industry structure opportunities appear, new energy, big data, cloud computing, automotive electronics and other emerging applications are still growing, ChatGPT and other AI applications drive the demand in the field of artificial intelligence, with 5G, AI, Internet of things, autopilot, VR/AR and other new round of technology gradually towards industrialization, the next decade, China's semiconductor industry is expected to usher in a golden period of import substitution and growth.
Increase the layout of emerging products and constantly enrich the product line:
The company has accumulated a series of product lines in product areas such as power semiconductors, which can provide customers with rich products and system solutions, and continue to increase the layout of emerging products. The 23-year semi-annual report revealed that 8-inch high-end IGBT capacity-building and 12-inch high-end IGBT pre-research capacity construction has been carried out in an orderly manner, and the sales revenue of IGBT product line is about 400 million yuan, an increase of 127% over the same period last year. The third-generation semiconductor plate, the semi-annual report revealed that the company's silicon carbide and gallium nitride power device sales revenue increased by about 3.6 times compared with the same period last year, silicon carbide MOS in new energy vehicles, photovoltaic energy storage, industrial power and other areas of customer volume, silicon carbide MOS monthly sales continued to rise in the first half of the year, the proportion of silicon carbide power device sales gradually increased to more than 50%. The research and development of SiC MOS and SiC modules and the pre-research of HPD are being carried out in an orderly manner. In the field of gallium nitride, the company gives full play to the advantages of power customer resources, speeds up the optimization of gallium nitride wafers and packaging platforms, and constantly enriches the number of products, and many second-generation products have passed industrial-grade examinations. in the fields of communications, industrial control, lighting and fast charging, the company has achieved customer cooperation in nearly ten industries, and the products have entered the stage of batch supply, helping revenue increase by 192% in the same period. At the same time, the energy density of the third-generation gallium nitride chips in the industrial control and communication fields has been significantly increased, the package has been significantly reduced, and the development work has been promoted in an orderly manner.
In addition, gallium nitride 8-inch process and product platform research and development has achieved full-process connectivity, static electricity and so on in line with expectations.
Investment suggestion: we estimate that the company's income from 2023 to 2025 will be 10.664 billion yuan, 12.477 billion yuan and 14.972 billion yuan respectively, and the net profit will be 1.782 billion yuan, 2.222 billion yuan and 2.952 billion yuan respectively. The company will be given 47 times PE in 2023, with a target price of 63.45 yuan, maintaining the "buy-A" investment rating.
Risk tips: the prosperity of the industry is not as good as expected; product development is not as expected; market development is not as expected.