Shannon Xinchuang announced that its wholly-owned subsidiary United Chuangtai Technology Co., Ltd. received an AMD dealer confirmation letter: the wholly-owned subsidiary United Chuangtai Technology Co., Ltd. received the “AMD Dealer Confirmation Letter” signed by Chaowei Semiconductor (AMD) and agreed to conduct procurement business with designated distributors of Co-Chuangtai and AMD.
Key points of investment
Leaders of authorized semiconductor distributors, Hynix and MTK agents are leading semiconductor authorized distributors. After years of dedicated cooperation and development, the company has accumulated many high-quality original factory licensing qualifications, and has successively obtained agency rights for SK Hynix, one of the world's leading memory suppliers, and MTK, a world-famous main control chip brand, forming an advantage in the original factory agency line. The company's semiconductor distribution business accounts for more than 95% of total revenue, of which SK Hynix's enterprise-grade storage products account for about 60%, and MTK's main control chips account for about 35%. Compared with 2022, SK Hynix's share declined and MTK's share increased. Among these two types of products, due to the recovery in storage market prices, SK Hynix's share is expected to increase in 2024, MTK's share of revenue will decrease, and the company will directly benefit from server-related demand and storage recovery.
The subsidiary was qualified as an AMD dealer and joined forces to explore the computing power market
The company's main distribution products include enterprise-grade storage products such as DRAM and NAND, as well as main control chips used in consumer electronics. The enterprise-grade storage products distributed by the company are used in servers in data center construction and other fields. The subsidiary and Chuangtai have now received an AMD dealer confirmation letter. The company will use the synergy of sales channels to sell new products to the company's existing customers to meet the diverse needs of customers. As the world's leading semiconductor chip provider, AMD achieved growth in shipments and revenue in both server and consumer PC market share in Q1 2024, accounting for 20.6% per unit shipment and 16.3% revenue share, maintaining steady year-on-year growth. This time, Co-Chuangtai received a dealer confirmation letter from AMD, which will help increase customer stickiness and enhance the company's competitiveness. It is expected to have a positive impact on the company's financial situation and operating results in 2024 and future years.
Self-developed storage products, “distribution+product” are two wings in one
The company established Shenzhen Haipu in a joint venture with partners such as Dapu Microelectronics and Junhai Rongxin in May 2023, and established a subsidiary of Shenzhen Haipu in the second half of 2023. Shenzhen Haipu is an enterprise positioned as an enterprise integrating R&D, production and sales of enterprise-level SSDs. It has a good basic advantage in the distribution business of listed companies, and has a high starting point in terms of raw material supply and customer introduction. The plan is to focus on eSD, while Wuxi Haipu focuses on DRAM modules. At present, Shenzhen Haipu has launched products and achieved small sales in 2023. The two types of products will be produced starting in 2023, and good feedback has been received one after another, and the two products will continue to advance simultaneously. Based on the semiconductor distribution business, the company can use superior original manufacturers and customer resources to extend and develop upstream in the semiconductor industry chain, enhance the company's comprehensive competitiveness in the entire semiconductor industry chain, and achieve steady, continuous and rapid growth in the company's revenue and profit on this basis.
Profit forecasting
It is predicted that the company's revenue for 2024-2026 will be 155.56, 17.8.22, 20.321 billion yuan, and EPS will be 0.85, 1.01, and 1.15 yuan respectively. The PE corresponding to the current stock price is 40.1, 34.0, and 29.6 times, respectively. The company has established good and stable business relationships with the original manufacturer and major customers, directly benefiting from server-related demand and storage recovery. At the same time, the new eSSD and DRAM module businesses will also continue to advance, which is expected to open up long-term growth Space maintains an “increase in weight” investment rating.
Risk warning
Macroeconomic risks, risk of product development falling short of expectations, risk of increased industry competition, risk of downstream demand falling short of expectations.