A leading specialty process foundry company in China. The company is a foundry enterprise with comprehensive coverage of characteristic process platforms in the industry. Based on the strategic goal of advanced “characteristic IC+ power devices”, the company provides foundry and supporting services for diversified characteristic process platforms including embedded/standalone non-volatile memory, power devices, analog and power management, logic and RF, etc. based on expanding characteristic process technology.
The company achieved revenue of 16.786 billion yuan in 2022, up 57.91% year on year, net profit of 3.09 billion yuan, up 81.24% year on year; the company achieved revenue of 12.953 billion yuan in the first three quarters of 2023, an increase of 5.64% year on year, and net profit of 1,685 billion yuan. The reason for the company's revenue growth from 2020 to 2022 was mainly driven by the gradual increase in the company's 12-inch production capacity and rising downstream demand, which led to an increase in wafer unit prices. Affected by the decline in industry sentiment in 2023, revenue growth is slowing down. It is expected that the company's revenue will continue to grow in the future as 12-inch fabs expand production and demand for downstream consumer electronics picks up.
With the layout of a characteristic process platform, technological achievements and revenue growth are remarkable. The company is a leading specialty process foundry enterprise in China. The company has leading embedded non-volatile memory platform technology in the industry, leading power device platform production capacity, covering a wide range of business, and analog and power management platforms covering all levels of voltage products. The company competes differentiated in the field of characteristic processes, has the world's leading deep groove superjunction MOSFET technology, and has sufficient production capacity in power device/smart card IC foundry and MCU foundry. According to data from Jimei Consulting, the company currently accounts for about 26% of companies in the domestic foundry market, ranking second in the country. Looking at subsequent growth, along with 8-inch optimization and upgrading, characteristic process technology upgrades, and the expansion of production capacity in the 12-inch production line, the capacity utilization rate continued to remain high. The unit price of wafers and gross margin continued to increase, and subsequent production capacity drove development.
Investment advice: The company's revenue for 2023-2025 is estimated to be RMB 16.634/173.93/RMB 18.664 billion, respectively, and net profit to mother is RMB 15.53/18.37/RMB 1,984 billion, respectively. Because the company has an advantage in the field of specialty process foundry, subsequent expansion of production capacity has opened up a growth curve. Covered for the first time, a “gain” rating was given.
Risk warning: Downstream demand falls short of expected risk, industry competition increases risk, macro environment uncertainty risk.