Incidents:
Recently, in response to investors' questions on the interactive platform, Broadcom Integrated said that the company has launched the world's first IoT chip that supports Wi-Fi 6, which solves the problem of communication bandwidth utilization efficiency when multiple users coexist, and achieves the characteristics of high capacity, high speed rate, and low latency, so it can be widely used in the IoT field. At the same time, the company has also begun research and development of Wi-Fi 7 chips.
Comment:
Leading wireless connectivity chip company, leading low-power technology. The company is a leading wireless connectivity chip company in China, focusing on the design and development of wireless communication integrated circuit chips, and has a leading market share in some related segments of wireless ICs for consumer electronics and industrial applications in China. Reducing chip power consumption and extending battery life is the most important technical means of improving the competitiveness of smart mobile products and IoT products. The company's low-power integrated circuit design capabilities are highly competitive. In particular, it has accumulated many important integrated circuit IPs such as low-power power management circuits, low-power RF transceivers, low-power frequency synthesizers, and low-power oscillators.
Continue to develop and improve the product matrix, and enter the Internet of Things to further develop market segments. The company has successfully developed the world's leading 5.8 GHz cordless phone integrated transceiver chip, a highly integrated 2.4 GHz cordless phone transceiver chip, a low power 5.8 GHz general wireless FSK transceiver chip, and the first 5.8 GHz integrated transceiver chip to meet China's national standard for non-stop toll collection on highways, etc., leading the market share of various chip products. By starting with the wireless communication market segment, the company continues to expand its business, and by producing different types of products to meet different application requirements, the company gradually became a market-leading multi-product line wireless communication chip designer, including 5.8 GHz products, Wi-Fi products, universal wireless, Bluetooth, etc. Through deep cultivation and research of the industry, products are defined and perfected according to market and application segmentation requirements to ensure the optimization and improvement of product quality and performance indicators.
Actively building an open source system ecosystem is expected to benefit from OpenHarmony's development. The company's multiple chip products have passed Hongmeng certification, and the high-performance Wi-Fi MCU general development board code has been officially integrated into the OpenHarmony backbone, making major breakthroughs in the security of the OpenHarmony open source operating system and the richness of IoT connections. The company's products are widely used in IoT fields such as the smart home appliance market, drone and aircraft model markets, new energy vehicles, and the electrical market. The company is actively building an open source system ecosystem, which is expected to benefit from the development of OpenHarmony.
Profit forecast and investment rating: We expect the company's net profit to be -1.16/ -0.52/031 billion yuan in 2023/2024/2025, respectively. Considering that the company is a leading wireless connectivity chip company in China, it is expected to benefit from the development of the OpenHarmony ecosystem, turn losses into profits, achieve initial coverage, and give a “gain” rating.
Risk warning: downstream demand falls short of expectations, the competitive landscape deteriorates, Hongmeng's development falls short of expectations