The company is a domestic technology-leading power device Fabless enterprise. The MOSFET process is mature and the models are complete. The company is the first company in China to simultaneously have four major product platforms: groove-type, super-junction, shielded gate MOSFET and IGBT. Up to 4M24, there are more than 3,000 product models, covering the full range of 12V-1700V. The products are widely used in automotive, optical storage and server power supplies. In '23, the company achieved revenue of 1,477 billion yuan (yoy -18%); achieved net profit of 323 million yuan (yoy -26%); 1Q24 achieved revenue of 371 million yuan (yoy -1%), and achieved net profit of 100 million yuan (yoy +54%). The decline in performance in '23 was mainly due to increased industry competition, price cuts for some products, and weak recovery in downstream demand. The Q24 performance side greatly improved major product structure upgrades and cost optimization.
High-end fields such as new energy vehicles and AI servers continue to be popular, and demand for power devices is improving for a long time. According to the 2013 annual report data, the company's revenue in the automotive sector was 221 million yuan, increasing its revenue share to 15%. The company currently has 200 automotive-grade MOSFET products, continues to supply leading customers such as BYD and Bethel, and has been targeted by United Electronics' more than 20 automotive electronics projects. Domestic and foreign manufacturers are speeding up deployment, and demand for training and reasoning is increasing. Currently, AI-related medium- and low-voltage MOS have been sold in batches to customers with leading computing power, and the company's share is expected to grow further in the future.
Deeply bundling foundry costs is more advantageous, and actively lays out advanced sealing and testing to integrate industrial chain resources. The company has established a long-term strategic partnership with Huahong Hongli, which is more competitive on the cost side. The company's gross margin in a single quarter has increased quarterly since 2H2023, and the gross margin of the 1Q24 company has increased to 34.76%, an increase of 2.99 pcts over the previous month. In 2022, the company raised 1.4 billion yuan and issued an additional 12.89 million shares, with an issue price of 110.0 yuan. It is mainly used for R&D and industrialization of SiC/GaN power devices and encapsulation, R&D and industrialization of power driver ICs and intelligent power modules (IPM), and R&D and industrialization of power integrated modules (including vehicle grade) such as SiC/IGBT/MOSFETs.
The company is forecast to achieve revenue of 17.68/22.06 billion yuan in 24-26 respectively, +19.76%/+24.75%/+22.85% year-on-year, achieving net profit of 3.89/5.28/ 674 billion yuan, +20.33%/+35.74%/+27.65% YoY, and corresponding EPS of 1.30/1.77/2.26 yuan. Considering the company's efforts in high-end fields such as new energy vehicles and AI servers, the Fabless model for companies with abundant foundry production capacity in the industry has a significant cost advantage. It was given 35xPE in 2024, corresponding to a target price of 45.50 yuan/share. For the first time, coverage was given, and a “buy” rating was given.
Downstream demand falls short of expectations; market competition intensifies; supply chain risks; the ban on restricted stocks is lifted.