Key points:
Technical strength has made charge pumps the world leader, and the popularity of fast charging is expected to benefit mainly
The company ranked first in the world for charge pumps with its technical strength. The efficiency of charge pumps has always been one of the key directions in technical research. According to charging head network tests, the company's 120W product SC8571 achieved the industry's highest peak efficiency of 98.65%, reflecting the company's leadership in technical strength. In 2021, the company's charge pump shipments ranked first in the world, accounting for 24% of the market share. After small-batch shipments in 2020, it only took a few years to become the leader in the charge pump field.
The charge pump market is expected to continue to grow rapidly. According to data from the Huajing Industrial Research Institute, the penetration rate of charge pumps will be about 35% in 2021; it is expected that the penetration rate will increase to about 90% by 2025, maintaining rapid growth. Samsung and Apple are the top two mobile phone shipments in the world, and the charging power of their phones is still low. We expect demand for charge pump chips from the two leading companies to increase dramatically in the future.
We believe that as a rising star, the company has ranked first in the global charge pump market share for several years, reflecting the company's strong technical strength in the field of charge pumps, and is expected to benefit mainly under the trend of continuous growth in the charge pump market.
Expand mobile phone link products, and open up new fields of growth for charging heads and OLED products
Efficient and highly integrated power solutions are expected to usher in new opportunities under the trend of integration and unification of the fast charging market. The fast charging industry is moving towards integration and unification. ① Fast charging standards integration: China's integrated fast charging standards were introduced, and the company's power supply+device side collaborated to support UFCS promotion. ② Unified mobile phone interface: All iPhone 15 series models have switched to Type-C, and the mobile phone interface is unified. Type-C is closely related to fast charging, and unified interface is conducive to the full popularization of mobile phone fast charging.
We believe that under the general trend of integration and unification of mobile phone fast charging, the company's new highly integrated product POWERQUARK conforms to the general logic that the industry pursues, reduces design difficulty and increases the popularity of fast charging, and is expected to benefit from the rapid development of the fast charging industry.
Under the trend of OLED localization, the company's OLED products are expected to expand. According to data from Qunzhi Consulting, mainland China shipped about 120 million OLED panels in the first half of 2023, an increase of 74.1% over the previous year. The company's Amoled power supply chips are mass-produced and shipped in mobile phone clients.
The company's high-efficiency Amoled PMIC chip project expects the new product to achieve leading international standards in terms of efficiency, power consumption, maximum brightness, and compatibility with different types of screens.
We believe that the company's Amoled power supply chips will benefit from the two major trends of continuous growth in OLED panel shipments and localization of the panel industry, and are expected to achieve volume growth.
Focusing on power chain technology, it is expected that more incremental companies' product power supply and battery management chips will provide various power and battery management solutions in automotive and other fields, and there are many downstream applications.
The company's revenue in the automotive sector doubled in the first half of '23. In the first half of 2023, the company's automotive electronics revenue grew by more than 100% compared to the previous year, and the products have been introduced to many well-known leading customers in the industry. The company attaches great importance to the automotive electronics business, invests many resources, and develops multiple projects at the same time.
We believe that the company is expected to continue to utilize its technical advantages in power chain product design to achieve rapid growth in many fields such as automobiles.
Investment advice:
We believe that the company has strong technical strength in the power supply chain. The core product charge pump chip is expected to continue to benefit from the development of the fast charging industry and continue to maintain rapid growth. At the same time, new products in the fields of charging heads and OLEDs are expected to contribute more revenue growth in the future. We expect the company's revenue in 2023-2025 to be 1,765/24.96/3.479 billion yuan, net profit to mother of 298/4.37/621 million yuan, EPS 0.70/1.03/1.42 yuan, and the closing price on January 29, 2024 is 29.39 yuan. The corresponding PE is 41.80/28.50/20.04 times, giving the company an “increase in holdings” rating for the first time.
Risk warning
Downstream demand falls short of expectations; the company's technology research and development and promotion of new products fall short of expectations; industry competition intensifies, etc.