Zhuo Shengwei: Deeply involved in the RF field for more than 10 years, the countryside is surrounded by cities, with a market share of 5%. The first domestic company was founded in 2006. Since 2012, it has transformed from mobile phone TV chips to basic RF products such as switches and LNA, and has successfully entered the supply chain of Android manufacturers such as Samsung and Mi OV. Since 2019, the company has strongly attacked high-end RF products, and the market share of receiver modules has gradually increased, and promoted RF top product filters and transmitter PAMID modules. In 2022, the company's total revenue was 3.677 billion yuan, with a gross profit margin of 53%, of which RF discrete devices had revenue of 2,491 billion yuan, accounting for 68% of revenue, and RF modules had revenue of 1,119 billion yuan, accounting for 30% of revenue.
Competitive advantage: The core team insists on positive breakthroughs, the RF product coverage is the highest in China, and is favored by Samsung and Mi OV. The company's core team graduated from Qingbei and has a deep industrial background. Under the R&D concept of “starting from principles, breaking through from zero frontal ground”, the company's RF front-end product coverage is number one in the country, and PAMID modules with a high-end layout are catching up with international leaders. Based on R&D capabilities and product advantages, the company's main customers include mainstream Android manufacturers such as Samsung and Mi OV.
Industry Beta 1: The volume and price of 5G RF front-ends have risen sharply, and the RF market is expected to exceed $25 billion in '28.
The wave of 5G phone switching continues. Yole expects the global 5G phone penetration rate to increase dramatically from 47% in 2022 to 82% in 2028, and shipments will increase from 603 million units to 1,116 million units. At the same time, due to the significant increase in the number of frequency bands covered by 5G phones, the stand-alone RF value of 5G phones has doubled to 20 to 30 US dollars/unit. Taken together, the global RF front-end chip market is expected to grow from 19.2 billion US dollars in 2022 to 26.9 billion US dollars.
Industry Beta 2; in the highly integrated Phase 7 Lite era, the value of a stand-alone PAMID can reach $11.
5G RF front-end fog demand has surged, and high-integrated RF solutions have evolved into Phase 7Lite (LNA+PAMID). According to statistics, the PAMID value in a single 5G phone can currently reach 11.45 US dollars, with an average value of about 6.71 US dollars. The global PA module market is expected to grow to 12.158 billion US dollars in 2028. Among them, the L-PAMID module market size is 11.175 billion US dollars, accounting for 91.91.91% of the PA group market.
Individual stock Alpha: Xinzhuo has fully entered large-scale mass production, and high-end POIMAX-SAW may be the better solution.
Currently, the filter market that determines the performance of PAMID is divided by Murata/Qualcom/Qorvo/Broadcom. CR4 has reached 86%, and they all use the IDM model, making it difficult for other RF manufacturers to obtain OEM production capacity. Zhuo Shengwei chose to build its own Xinzuo filter production line. By the end of 2022, the production line had fully entered large-scale mass production, and as of 2023H1, it had the ability to mass-produce its own MAX-SAW brand on a large scale (using POI substrates, the performance can reach BAW/FBAR levels below sub-3GHz).
Therefore, the company is expected to take the lead in the domestic production of PAMID, enjoy the leading domestic RF chip in the high-value PAMD market, embrace the 100 billion high-end RF front-end market, and maintain a “gain” rating.
Yole expects the global RF front-end market to reach $26.9 billion in 2028. As the leading semiconductor RF chip leader in China, the company is expected to seize a high share of RF front-end and open the 100-billion-level high-end RF front-end market. Net profit is expected to be 11.65/15.43/1.95 billion yuan respectively from 2023 to 2025, corresponding to PE 50.4/38.1/30.1 times in 23/24/25, maintaining the “gain” rating.
Risk warning: risk of industry fluctuations; risk of increased competition; risk of lagging technology development; risk of supply chain delivery. winds