Focusing on the fields of power, MEMS and RF, we provide one-stop system foundry services. The company focuses on the three product directions of power devices, MEMS, and radio frequency, and provides one-stop system foundry services from design services, wafer manufacturing, module packaging, application verification to reliability testing. The products cover application fields such as new energy vehicles, wind and wind storage, and high-end consumption. In terms of performance, the product structure continues to be optimized. 23H1 vehicle sector accounts for 52% of revenue, +511% year-on-year, and has covered more than 90% of new energy vehicle terminal customers. Industrial control sectors such as wind and wind storage account for 30% of revenue, +72% year-on-year, thus driving the company's overall revenue growth rapidly.

Power: The operating rate of IGBT remains high, expanding silicon carbide and power ICs to open up long-term space.

As of the mid-year report of 23, the company's IGBT and MOS production capacity reached 80,000 pieces/month and 65,000 pieces/month respectively, and the IGBT production capacity utilization rate for automotive and industrial control was over 95%. Expanding silicon carbide and power ICs to open up long-term space. In terms of silicon carbide, the company has built 2,000 pieces/month automotive-grade SiC MOS production capacity used in automotive main drive inverter high-power modules. 23H1 ranks first in SiC MOSFET shipments in China, and will continue to expand mass production in the future; in terms of power ICs, the company's IPO fund-raising project “SMIC Shaoxing Phase III 12-inch Special Process Wafer Manufacturing Pilot Line Project” plans to build a 12-inch special process wafer manufacturing pilot line with a monthly output of 10,000 pieces to meet IGBTs, MOSFETs, and HVIC (BCD) production requirements.

MEMS: Continued intensive research and development, and high performance filters and automotive MEMS products are progressing rapidly.

Microphone sensors contribute the main revenue to the company's MEMS business, while the revenue of products such as high-performance filters and inertial sensors has grown rapidly in recent years. In terms of automotive MEMS products, the 23H1 in-vehicle inertial navigation system has made breakthroughs in high-precision gyroscopes and high-reliability accelerators. Vehicle pressure sensors have grown significantly, while also focusing on light sources and scanning components in the direction of lidar. It is the only domestic factory that ships light source chips for lidar in batches.

Profit forecast and investment rating: The company is a leading domestic automotive-grade OEM, expanding production of silicon carbide and power ICs to open up room for long-term growth. Based on this, we estimate that the company's revenue for 2023-2025 will be 53.87/72.48/9.763 billion yuan. The current market value corresponding to PS is 7.0/5.2/3.9 times, respectively, covering the “buy” rating for the first time.

Risk warning: the risk that downstream demand falls short of expectations; the risk that production capacity and output will not increase as expected; the risk of increased market competition.