Key points of investment

A leader in small to medium capacity memory chips, and its revenue volume continues to grow

The company is deeply involved in low-power NorFlash memory chips and high-reliability EEPROM memory chips, and is deeply tied to high-quality suppliers. At present, the company's core products are widely used in various TWS Bluetooth headsets, industrial control, automotive electronics, wearable devices, mobile phone camera modules, AMOLED, home appliances, TDDI and other fields. The company covers OPPO, Vivo, Honor, Xiaomi, Lenovo, Midea and many other well-known enterprises in the domestic market.

At the same time, it continues to expand overseas markets, covering well-known terminal customers such as Samsung, Panasonic, HP, and Seagate, and has established stable cooperative relationships with main control manufacturers such as Dialog Semiconductor (DLG). With the rapid expansion of domestic and foreign customer resources, the company's business performance has maintained rapid growth in recent years.

Product lines continue to be promoted, and the Memory+ strategy opens up space for growth. The company uses the synergy of design and process to optimize embedded memory technology on advanced logic process platforms and build MCU product platforms with general performance and high reliability. According to Precedence Research, the global MCU market is around $28.2 billion in 2022, expected to reach $58.2 billion in 2030, and a CAGR of 9.48% over the next 8 years. According to HIS and IC Insights, China's MCU market size in 2022 was about 39 billion yuan, up 7.7% year over year, and is expected to exceed 50 billion yuan by 2026. Since its establishment, the company has built an industry-leading general-purpose low-power, high-reliability memory product line. Product synergy has helped the MCU product line penetrate the general field more quickly and open up room for long-term growth.

Investment advice

The company is a leader in small to medium capacity memory chips in China. At the same time, it continues to deploy Memory+ products such as MCU to open up room for long-term growth. We expect the company to achieve revenue of 11.5/15.2/1.94 billion yuan in 2023-2025, an increase of 24.42%/32.28%/27.37% over the previous year, and achieve net profit of -0.88/1.10/236 million yuan. Based on the company's small to medium capacity storage industry leadership and future MCU field layout, we maintain the company's “buy” rating.

Risk warning

Increased market competition, risk of product technology iteration, and risk of fluctuations in downstream demand sentiment.