The Xiaomi Industrial Fund is strategically increasing, and nanoscale microisolation driver chips have entered the supply chain. The Xiaomi Changjiang Industrial Fund strategically invested in Nanxin Micro before the company went public. After the company went public in 2022, Xiaomi Changjiang held 697,000 shares, with a shareholding ratio of 0.69%. In terms of product cooperation, nanoscale microisolated driver chips entered the Xiaomi supply chain to provide isolated drivers to drive MOS tubes on the Xiaomi 1800W outdoor power supply 1000 Pro. On March 28, 2024, Xiaomi released the latest smart electric vehicle, the SU7, to officially close the “entire ecosystem of people and cars”. All models are equipped with intelligent assisted driving as standard, and support a long battery life of 700 kilometers. We believe that the Xiaomi SU7 combines smart driving, smart cabin and ecology, and the full range of nanosin micro in-vehicle solutions are expected to benefit deeply.
Demand for automotive electronics has picked up significantly, and the share of this business has increased rapidly. 2023Q3 revenue by application:
Automotive electronics accounts for about 32%; consumer electronics accounts for about 13%; pan-energy accounts for 56% (industrial automation accounts for 18%; photovoltaics and energy storage accounts for 16%; digital power accounts for about 10% of revenue). The penetration rate of new energy vehicles has increased steadily, the 2023Q3 automotive electronics market has clearly picked up, and the company's automotive electronics revenue has increased significantly month-on-month. As demand for analog chips grows in downstream vehicle intelligence, the value of the company's bicycle chips is expected to increase further in 2024. Furthermore, as Chinese automakers and Tier 1 suppliers build overseas factories, the company continues to go overseas and break through the local customer base.
New isolation+power management products are blooming, and 2024 is about to be released. Isolated drive products with protective functions have been mass-produced in main drive applications for some NEV customers; functional safety main drive isolated drive products are expected to be mass-produced in 2024; leading customers of photovoltaic inverters and industrial motor drives are implementing isolated drives to replace optocoupler drives. The company's single-channel/three-channel/12-channel taillight LED driver chips were successfully introduced to leading automotive headlight customers and shipped on a large scale; next-generation isolated half-bridge drive and multi-channel half-bridge motor drive products were mass-produced in 2023Q3; power supply LDO has already been introduced to some customers; and products related to high-side switches are expected to be mass-produced in 2024.
Profit forecasts and investment suggestions: Optimistic that the company continues to break through in automotive-grade products and magnetic sensor chips, acquire Quantum Micro's product matrix to build an analog chip platform company. We expect the company's 2024/2025 revenue of 23.01/2,852 billion yuan and net profit of 135/393 million yuan to maintain a “highly recommended” rating.
Risk warning: Downstream demand falls short of expectations, new product development progress falls short of expectations, overseas manufacturers compete.