EEPROM establishes a solid basic market and collaborates with downstream to promote new product research and development. The company's product line includes non-volatile memory chips, voice coil motor driver chips, and smart card chips. As the DDR5 penetration rate increases, the revenue of DDR5 memory modules supporting SPDs is expected to increase significantly. The company also actively collaborates with the downstream industry chain to develop new products, including automotive-grade EEPROM products, closed-loop and optical anti-shake motor driver chips, etc.
Preemptively deploy DDR5 SPD EEPROM to help increase performance through customer accumulation. The company cooperated with Lanqi Technology to develop SPD EEPROM products supporting a new generation of DDR5 memory bars. It strictly complies with JEDEC DDR5 standards, integrates I2C/I3C bus hubs (hubs) and high-precision temperature sensors (TS), and is used in UDIMM and SODIMM memory modules in the computer field and RDIMM and LRDIMM memory modules in the server field. In 2021, the company's SPD EEPROM products supplied with DDR5 memory bars passed the test certification of major downstream memory module manufacturers and successfully achieved mass production. In terms of DDR4's EEPROM products, the company has already shipped to customers such as Adata, Avant, Memory Technology, G.Skill, etc. The company has accumulated deep customer resources, and the revenue of DDR5 SPD products is expected to grow rapidly.
The potential of in-vehicle EEPROM has been unleashed, and the automotive business is growing at an accelerated pace. In 2009, Juchen Co., Ltd. inherited the international advanced automobile quality control system and development process from ISSI, and sold EEPROM products used in front-mounted entertainment equipment such as central control screens and radios in cars in that year. Currently, the company has mainstream capacity A1 grade, a full range of A2 and A3 grade EEPROM products, which are widely used in peripheral components such as automotive cameras, LCD displays, and entertainment systems. End customers include SAIC, BYD, Weixioli, Tesla, FAW, BAIC and many other mainstream automobile manufacturers. In the future, the company will further develop automotive-grade EEPROM products with ISO 26262 standards and gradually expand to core components such as BMS battery management systems, intelligent cockpits, and MDC. Vehicle storage applications are expected to become an important growth pole.
Profit forecast and rating: Juchen Co., Ltd. lays out DDR5 memory modules to support high value-added application fields such as SPD and automotive electronics to further develop NOR Flash products. In the future, with the increase in DDR5 penetration, the company's profitability is expected to continue to increase. The company's revenue for 2023-2025 is estimated to be 717 million yuan, 10.97 billion yuan, and 1,428 million yuan respectively, and net profit of 1.26, 3.58, and 491 million yuan respectively, corresponding to PE of 86, 30, and 22 times, respectively, covering the first time, giving it an “increase in holdings” rating.
Risk warning: introduction of new products, downstream demand falling short of expectations, risk of fluctuations in raw material prices