Main points of investment

MEMS, power device foundry leader, provide one-stop solution. Founded in 2018, the company specializes in power, sensing and transmission applications, providing contract manufacturing services for analog chips and module packages. The company takes wafer foundry as the starting point and extends down to module packaging to provide one-stop foundry solutions for customers at home and abroad. The manufacturing process of MEMS and power devices is relatively special, and the company's R & D team carries out in-depth optimization and customized design for the benchmark process platform to meet the diversified needs of customers.

8 inch production capacity continues to be fully loaded, fund-raising projects to help expand production. The company has an 8-inch wafer foundry, which can provide automotive specification-level wafer foundry services in areas such as MEMS and power devices. at present, the IGBT production capacity of core chips used in vehicle and industrial control fields is up to 80,000 wafers per month, and its capacity utilization exceeds 95% sic new production capacity of 2000 wafers per month, and capacity utilization exceeds 90%.

In addition, the company also has a MOSFET production capacity of 65,000 pieces per month, MEMS production capacity of 11,000 pieces per month, and HVIC production capacity of 5000 pieces per month. The company's fund-raising projects include "MEMS and power device chip manufacturing and packaging test production base technical transformation project" and "second phase wafer manufacturing project". Among them, the total investment of "MEMS and power device chip manufacturing and packaging test production base technical transformation project" is 6.564 billion yuan, which has been invested and completed by the company with self-raised funds, and the production capacity has been expanded from 425,000 wafers per month to 100000 wafers per month. And improve the technological level of the company. The second phase of the wafer manufacturing project, with a total investment of 11 billion yuan, was implemented by the subsidiary SMIC across the state to build an 8-inch wafer production line with a monthly production capacity of 70,000 pieces, which is expected to reach production in 23 years.

The downstream is widely used, and the on-board products are developing rapidly. In the first three quarters of 2023, the company's main revenue was 3.832 billion yuan, an increase of 21.26% over the same period last year. Distinguishing from the application field, products in the vehicle field dominated by new energy vehicles have been introduced into a comprehensive market layout and achieved large-scale mass production. Product applications cover automobile main drive and body control, BMS, OBC, power management and new energy charging, filling a number of domestic gaps. In the first half of 2023, vehicle application revenue accounted for 51.86%, an increase of 510.67% over the same period last year. High-end industrial control fields such as photovoltaic, wind power, energy storage, server power supply, charging piles, smart grid and servers have been shipped in large quantities, and industrial control application revenue accounted for 29.60% in the first half of 2023, an increase of 72.41% over the same period last year. The company's products are widely used in branded mobile phones, 5G communications, the Internet of things, AR/VR, smart home appliances and other terminal products, with high-end consumer applications accounting for 18.54% in the first half of 2023.

Investment advice:

We estimate that the company's 2023-2025 homing net profit-13.4 Mercure 9.0 Universe 600 million yuan, for the first time covered to give a "buy" rating.

Risk Tips:

Research and development schedule is not as expected risk; product iteration risk; market competition aggravates risk; demand is not as expected, overcapacity risk.