Key points of investment
Next Wednesday (March 13), there will be an inquiry for a GEM IPO “Star Chen Technology”.
Xingchen Technology (301536.SZ): The company is the world's leading video surveillance chip enterprise. Its main business is the development and sale of video surveillance chips. Its products are mainly used in intelligent security, video intercom, and smart vehicles.
The company achieved revenue of 2,686 billion yuan/2,368 billion yuan/2,020 billion yuan respectively in 2021-2023, YOY was 125.19%/-11.85%/-14.66%, and the three-year compound annual growth rate of revenue was 19.21%; realized net profit to mother 754 million yuan/564 million yuan/205 million yuan, YOY was 247.29%/-25.13%/-63.72% in that order. According to preliminary estimates by the company's management, it is estimated that the 2024Q1 will achieve operating income of 454.1571 million yuan to 515.022,200 yuan, an increase of 3.96% to 17.89% over the same period last year; net profit attributable to shareholders of the parent company is estimated to be 30.9919 million yuan to 49.687 million yuan, a change of -33.67% to 6.34% over the same period last year.
Investment highlights: 1. The company is a leader in the global video surveillance chip industry; at the same time, the company continues to deploy AI technology in line with the intelligent trend of the industry. The company is a leader in the global video surveillance chip industry, with the highest market share in multiple segments; according to Frost & Sullivan data, in the field of smart security, the company's share of the global IPC SoC and NVR SoC markets in 2021 was 36.5% and 38.7% respectively, ranking first in the market; in the field of video intercom, the company's share of the global USB video conferencing camera chip market in 2021 was 51.8%, ranking first in the market; in the field of smart vehicles, the company's share of driving recorder chips in China in 2021 The market share is 24.0%, ranking second in the market. The share of the 1080P and above driving recorder chip market in China is 50.0%, ranking first in the market (the above figures are all calculated based on shipment volume). Based on this, in the context of video surveillance chips moving towards intelligence, the company continues to lay out AI technology and has made some progress in products in various fields; at the developer conference in December 2023, the company launched a vehicle Camera+AI scene chip solution, an SSU9386 four-core product for robot scenarios, and an SSU9383 multi-sensor fusion All In One robot SoC solution; in the research project, it covers 5 projects including “High-end Intelligent Multi-Platform Chip Development” and “AI Processor IP” R&D upgrades for AI processors or AI technology. 2. The predecessor of the company was funded by SigmaStar (Cayman), a subsidiary of MediaTek. Currently, Cayman is the company's largest shareholder, and many of the company's management and core personnel have worked for MediaTek's subsidiary Morningstar Semiconductor. According to the company's prospectus, the company's predecessor, Xingchen Limited, was founded by SigmaStar (Cayman, a wholly-owned subsidiary of MediaTek) on December 4, 2017, with a registered capital of 2 million US dollars. As of this offering, Cayman owned 31.98% of the company's shares, making it the company's largest shareholder. Additionally, the company's chairman Lin Yongyu, director Sun Mingyong, deputy general manager Lin Bo, and marketing head He Xiaoming have all worked for MediaTek's subsidiary Morningstar Software Research and Development (Shenzhen) Co., Ltd. (China headquarters of Morningstar Semiconductor). 3. The company's automotive products have entered the front-end market, and many products have passed inspection and certification. The company's automotive vision chips have gained a high market share in the rear assembly market, and the products are entering the front mounting/quasi-front assembly market. At present, the customer products equipped with the company's front-mounted smart vehicle chips have been the first to pass front-mounted GB/T 38892 certification; at the same time, the double warning products launched in the commercial vehicle sector were quickly introduced into the market and mass-produced on a large scale. The customer products have passed GB/T 19056-2021 testing and certification; and according to the company's official website, the company's latest vehicle specification product, SAC8542, has been designated by OEMs and has received corresponding orders, and has been rolled out on a large scale on the market.
Comparison of listed companies in the same industry: The company is mainly engaged in the R&D and sale of video surveillance chips, so Fuhanwei, Beijing Junzheng, Rockchip, Guokewei, and Cambrian, which are also engaged in video surveillance chip research and sales, were selected as comparable companies for Xingchen Technology. Looking at the comparable companies mentioned above, the average revenue scale (TTM) of the industry is 2,551 billion yuan, the comparable PE-TTM (excluding outliers and arithmetic average) is 54.66X, and the gross sales margin is 38.71%; in comparison, the company's revenue scale is lower than the industry average, and the gross sales margin is close to most comparable companies.
Risk warning: There is still a possibility that companies that have begun the inquiry process will not be able to go public due to special reasons; company content is mainly based on the content of prospectus and other public information; there is a risk that the selection of listed companies in the same industry is not accurate enough; there may be interpretation deviations in the selection of content data. The specific risks of listed companies are shown in the text.