Event review: On November 28, 2023, the 2023 Longxin Product Launch and User Conference opened as scheduled at the National Convention Center. With the theme of “Striking Water to the Middle”, the conference unveiled the major achievements of the new-generation general-purpose processor Dragon Core 3A6000 and the printer main control chip Dragon Core 2P0500, and announced to the outside world the Longxin processor core IP and Longxin autonomous command system architecture licensing plans.

Using the autonomous command system LoongArch (Longxin architecture): The company was founded on March 05, 2008. Its main business includes the development, sales and service of processors and supporting chips. The chips developed by the company include three series of processor chips and supporting chips such as Longxin 1, Longxin 2, and Longxin 3 series of processor chips and bridges. The Longxin 1 series is a low-power, low-cost embedded SoC or MCU processor. It usually integrates a 32-bit low-power processor core. The application scenarios target embedded special applications, such as IoT terminals, instrumentation, data acquisition, etc.; the Longxin 2 series is a low-power general-purpose processor, using a single-chip SoC design, and usually integrates 1-4 64-bit low-power processor cores. The application scenarios target industrial control and terminals, such as network equipment, industry terminals, intelligent manufacturing, etc.; the Longxin 3 series is a high-performance general-purpose processor, usually integrated Four or more 64-bit high-performance processor cores are used in conjunction with the bridge. The application scenarios target the information technology fields such as desktops and servers. The company has adhered to the development path of independent research and development for many years, and has formed its own core technology in the development of processors and supporting chips and system software. In 2020, through more than ten years of independent research and development and market-based operation, Longxin Zhongke launched the autonomous command system LoongArch (Longxin Architecture) under the condition that sufficient technology and experience has been accumulated in processor research and development, basic software research and development, and ecosystem construction. The LoongArch command system has passed an intellectual property evaluation by the China Electronic Information Industry Development Research Institute, an authoritative third party agency in China, and determined that the LoongArch command system and Alpha, ARM, MIPS, POWER, RISC-V, and X86 are different command system designs. The LoongArch command system incorporates the latest achievements in the evolution of modern command systems, and is more efficient in operation. Compiling the same source code into LoongArch compared to the MIPS previously supported by LoongArch, the number of dynamically executed instructions can be reduced by an average of 10%-20%. In terms of scalability, the LoongArch instruction system uses a basic set plus extension set architecture, and has now completed vector, virtualization, and binary translation extensions.

The 3A6000 and Longxin 2P0500 were released, and the autonomous controllable chip was upgraded again: On November 28, 2023, the 2023 Longxin Product Launch and User Conference opened as scheduled at the National Convention Center. With the theme of “Striking Water to the Middle”, the conference unveiled the major achievements of the new-generation general-purpose processor Dragon Core 3A6000 and the printer main control chip Dragon Core 2P0500, and announced to the outside world the Longxin processor core IP and Longxin autonomous command system architecture licensing plans. The Longxin 3A6000 processor uses the LoongArch Autonomous Command System (LoongArch). It is the first product of Longxin's fourth-generation microarchitecture. The main frequency reaches 2.5 GHz, integrates 4 newly developed high-performance LA664 processor cores, supports simultaneous multi-threading technology (SMT2), and the entire chip has a total of 8 logic cores. Integrated secure and trusted modules can provide secure boot solutions and national secret (SM2, SM3, SM4, etc.) application support. According to the test results of Saixi Laboratory of the China Electronics Technology Standardization Research Institute, the Longxin 3A6000 reached 43.1/54.6 points for the SPEC CPU 2006 base single-thread fixed/floating-point score at 2.5 GHz, and the multi-process fixed/floating point score reached 155/140 points respectively; the SPEC CPU 2017 base single-thread (rate1) fixed/floating-point score reached 5.05/7.78 points respectively, and the single-process multi-threading (speed) fixed/floating point scores reached 6.66 At /18.1 points, the multi-process (rate8) fixed/floating-point scores reached 21.3/21.0 points respectively; the measured stream bandwidth exceeded 42 Gb/s; and the Unixbench measured score exceeded 7400 points. Based on relevant test results, the overall performance of the Longxin 3A6000 processor is comparable to the 10th generation Core quad-core processor launched by Intel in 2020. The Dragon Core 3A6000 is compatible with Dragon architecture processor software such as the Dragon Core 3A5000. Operating system companies such as Tongxin and Kirin all fully support the new features of the Longxin 3A6000 on the basis of continuous compatibility. Longxin 3A6000 has improved binary translation support for software and hardware collaboration, which can improve binary translation efficiency, run more types of cross-platform applications, and meet various large-scale and complex desktop application scenarios.

Longxin 2P0500 is a master control SOC chip suitable for single/multi-function printers. The chip uses a heterogeneous core structure and integrates various functional modules such as DDR3 memory, GMAC, and OTG. It has functions such as print data reception, analysis and processing, print engine control, scan timing control, data scanning, image processing, and motor control. A single chip can meet various typical application requirements such as printing, scanning, and copying. Based on the Longxin 2P0500, Longxin Zhongke launched various solutions such as printers, scanners, and copiers, and cooperated with many mainstream printer manufacturers in China to complete the adaptation of various applications such as printing, scanning, and copying.

Investment suggestions: We predict that from 2023 to 2025, the company will achieve revenue of 707 million yuan, 1,079 million yuan, and 1,504 billion yuan respectively, and achieve net profit attributable to shareholders of listed companies - 168 million yuan, 56 million yuan, and 284 million yuan respectively. Affected by sluggish demand such as the stagnation in the e-government market, the net profit in 2023 is expected to be negative, so the PS method is used for valuation. The corresponding PS for 2023-2025 will be 65.35 times, 42.82 times, and 30.72 times, respectively. Considering the company's CPU launched based on an autonomous and controllable architecture, new product releases and continuous performance upgrades, the target market where the product is located has a large market space, is covered for the first time, and is recommended to increase holdings -B.

Risk warning: Downstream demand is sluggish, competition among peers intensifies, new product development and introduction falls short of expectations