Incidents:
On March 12, 2024, Jiejie Microelectronics released its 2023 annual report: the company achieved operating income of 2.06 billion yuan in 2023, an increase of 15.51% over the previous year; net profit to mother was 219 million yuan, a year-on-year decrease of 39.04%.
Comment:
The company's revenue in 2023 increased 15.51% year-on-year, 2023Q4 revenue picked up in a single quarter, net profit to mother increased 64.84% month-on-month, and downstream consumer electronics and other industries are expected to gradually recover. In 2023, the company achieved revenue of 2.06 billion yuan, a year-on-year increase of 15.51%, and net profit to mother was 219 million yuan, a year-on-year decrease of 39.04%.
By product classification, power semiconductor chip revenue was 611 million yuan, up 54.23% year on year; power semiconductor device revenue was 1,460 billion yuan, up 5.03% year on year. As the consumer electronics market gradually picks up and wafer makers' inventory removal is gradually completed, the global semiconductor market will gradually resume growth in the second half of 2023, and the market growth rate is expected to reach 20% in 2024. Downstream consumer electronics and other industries are expected to gradually pick up. The company's performance improved markedly month-on-month, 2023Q4 revenue picked up in a single quarter, and Q4 net profit to mother increased 64.84% month-on-month.
The company is actively expanding its product line. The company's automotive-grade chips focus on automotive-grade high-power devices such as DFN, LFPACK, and TOLL. On the basis of breakthroughs in thyristors, VD MOS, TRENCH MOS, etc., the company increased research and development of SGT MOS, SJ MOS, advanced rectifiers, etc., and continued to expand its product structure, application areas and customer structure, and gradually expanded its market share. The company continues to promote the implementation of the “Power Semiconductor 'Vehicle Grade' Packaging and Testing Industrialization Project” and the “High-end Power Semiconductor Device Industrialization Project” (Phase II) in Nantong. The company focuses on automotive-grade high-power devices such as DFN, LFPACK, and TOLL with automotive-grade chip packaging to further achieve performance such as lightness, greater current, higher power density, and lower power consumption, and broaden application fields.
The company plans to purchase 30.24% of Jiejie Nantong Technology's shares to create a complete IDM power semiconductor industry chain layout.
According to the company's announcement, Jiejie Microelectronics plans to purchase 30.24% of Jiejie Nantong Technology's shares. Of these, the share issuance and cash payments account for 65.00% and 35.00% of the transaction consideration, respectively. The share payment amount is 660 million yuan, and the cash payment consideration amount is 356 million yuan. Prior to this transaction, the company held 61.31% of Jiejie Nantong Technology's shares; after the transaction is completed, the company will hold 91.55% of Jiejie Nantong Technology's shares. Through the acquisition of minority shares in Jiejie Nantong Technology, the company's collaboration in R&D, manufacturing and sales in the field of high-end power semiconductor chip design and wafer manufacturing will be strengthened, and the entire power semiconductor IDM industry chain layout will be built.
Company profit forecast and investment rating: The company is a leader in thyristors and is actively expanding production to increase the share of MOSFET products. We expect the company's net profit to be RMB 333 million, RMB 519 million and RMB 793 million respectively in 2024-2026, corresponding to the current share price PE of 49X, 32X, and 21X respectively, maintaining the “recommended” rating.
Risk warning: (1) increased market competition; (2) production expansion progress falls short of expectations (3) risk of technology iteration.