Leading domestic high-end MEMS inertial sensor enterprise. The company's main products are high-end MEMS inertial sensors, including MEMS gyroscopes and MEMS accelerometers; the main downstream products are high-end industrial, unmanned systems, and high-reliability fields. The company's products are rapidly iterating. First-generation MEMS gyroscopes were developed in 2015, second-generation gyroscopes were mass-produced in 2017, and third-generation high-performance gyroscopes were mass-produced in 2019.

MEMS sensors have heavy snow on long slopes, and inertial sensors account for the highest proportion. According to Yole data, the global MEMS industry market reached US$13.595 billion in 2021 and is expected to reach US$22.253 billion in 2027, showing a steady growth trend. Judging from the market structure, inertial sensors account for the highest share. Among them, accelerometers, IMUs, and gyroscopes occupy 8.97%, 13.46%, and 2.75% of the market space, respectively. Judging from the development trend: (1) low-end MEMS gyroscopes are gradually being converted to highly integrated IMUs, and high-end MEMS gyroscopes will gradually replace some application scenarios of two-light gyroscopes; (2) the MEMS accelerometer market continues to grow rapidly; (3) IMU is the main form of inertial sensors in the future and will benefit from the growth of the inertial navigation market.

The autonomous driving and robotics market is developing rapidly, and the company's card is leading. In the field of autonomous driving, the combination of IMU and GNSS is expected to become the mainstream solution for autonomous driving navigation, and many models are already equipped with IMU modules as standard.

In the field of robotics, IMU is widely used for positioning various robots, including industrial robots, mobile robots, humanoid robots, etc. As a core component of inertial navigation and positioning, MEMS inertial sensors have fully benefited from the rapid growth of downstream autonomous driving and robotics markets.

The company is a scarce supplier of high-performance MEMS inertial sensors in China. The company is a leading enterprise of high-end MEMS inertial sensors in China. The technical level of gyroscopes and accelerometers has reached the world's advanced level. Under the wave of domestic substitution, it is expected that it will quickly replace the leading overseas share. The company attaches importance to research and development, and invests in high-end production capacity to stabilize its leading position in the industry. On the customer side, the company has in-depth cooperation with high-precision technology enterprises and scientific research institutes, and it is expected that the high gross profit of high-end inertial sensor products will be maintained. In the future, the company is expected to enter the automotive and robotics fields with deep technology and rich product iteration experience, opening up a new growth curve for the company.

Investment advice: The leading position of high-end MEMS inertial sensors in China is stable, and the addition of automotive IMU and robot projects opens up room for future growth. We estimate that the company's net profit for 2023/2024/2025 will be 1.61/2.39/327 million yuan, respectively. The PE multiples for 2023/2024/2025 were 96.21/64.76/47.19, respectively.

The first coverage gave an “increase in holdings” rating.

Risk warning: New product development and sales fall short of expectations; industry demand falls short of expectations; domestic substitution falls short of expectations.