Event: Fudan Weidian released its mid-2022 report on August 15, saying that in the first half of 2022, the company achieved an income of 1.702 billion yuan (YoY+50.83%), a net profit of 531 million yuan (YoY+172.99%), and a net profit of 519 million yuan (YoY+220.88%). In addition, the company paid 73.6986 million yuan in share fees in the first half of the year, and the net profit returned to its mother reached 605 million yuan after excluding the influence of share payment fees.
Corresponding to 2Q22 single quarter, the company realized income of 927 million yuan (YoY+47.85%,QoQ+19.43%), net profit of 298 million yuan (YoY+175.68%,QoQ+27.77%), and net profit of 293 million yuan (YoY+223.28%,QoQ+29.35%).
Q2's income and profit increased against the trend, and the profit level reached a new high. Under the influence of the epidemic and other unfavorable factors, the income and profit of Q2 company increased against the trend. The gross profit margin of 2Q22 company reached 66.18% (YoY+7.68pct,QoQ+2.59pct) and the net profit rate reached 32.12% (YoY+14.89pct,QoQ+2.1pct), which reached a record high. The main departments are: (1) the rapid release of high-margin products brings about the improvement of product structure: the company looks forward to strengthening production capacity guarantee at the initial stage of the epidemic, overcomes the impact of the epidemic on product production and delivery, and achieves varying degrees of growth in revenue from major product lines. At the same time, the company actively opens up the market and new customers, continuously adjusts the product structure, and rapidly increases the volume of products such as high gross margin FPGA, which brings about the improvement of business structure and profitability. (2) the cost of R & D:
Due to the impact of the epidemic, the pace of research and development of the company slowed down in the first half of the year, so the expenditure on R & D projects other than salary decreased in the first half of the year compared with the same period last year. 22H1's R & D expenditure increased by 21.2% compared with the same period last year, but the R & D expenditure rate decreased by 5.16%.
With the rapid growth of FPGA business, there is a bright future for technology leadership. In the first half of 2022, the company's revenue from FPGA and other chips was about 378 million yuan, and the sales generated by the contract increased by 120.84% over the same period last year, which continued to double, mainly due to the maturity of billion-level FPGA chip technology to meet the expectations of end customers, and the demand increased significantly. By the first half of 2022, the company has sold related FPGA products to more than 500 customers, which are widely used in communications, industrial control and other fields. At present, the company's new generation of billion-door-level FPGA product research and development work is under way, all aspects of performance compared with the previous generation of products will be greatly improved. At the same time, the company's PSoC products have also been successfully mass produced, and a number of customers are carrying out small batch trials, and the new generation of heterogeneous intelligent PSoC products with APU, GPU, VPU, eFPGA and AI engines have also achieved phased research and development results, which will further enrich the company's product matrix and continue to meet customer needs.
Safety and identification chips have grown steadily, and vehicle specification-level products have been mass-produced. In the first half of 2022, the company's security and identification chip product line achieved revenue of about 461 million yuan, an increase of 23.57% over the same period last year. The company's security and identification chip has three product directions: RFID and sensor chip, smart card and security chip and intelligent identification chip. It is the leading chip supplier of RFID, smart card, security module and NFC products in China. At present, the company implements the "overall plan whole system" and "deep ploughing terminal major customers" quality service route, and the development of key new products such as ultra-high frequency RFID chips, ultra-high frequency read-write chips, and security SE chips are continuously promoted, and are expected to be mass-produced one after another. At the same time, the company is actively developing the application scene of car regulation products, and has been mass-produced and landed in projects such as TBox safety chip and car digital key.
The business of non-volatile memory is growing against the trend, and the orders of highly reliable customers are increasing steadily. In the first half of 2022, the revenue of the company's non-volatile memory product line was about 487 million yuan, an increase of 33.8% over the same period last year. The company's three main product lines NOR Flash, SLC NAND Flash and EEPROM, under the adverse influence of the market boom and other adverse effects, through the continuous optimization of customer structure, the number of customer orders in the field of highly reliable applications has increased steadily and achieved reverse growth. At present, the company's storage product capacity covers 1Kbit-4Gbit, and product capacity and product segments continue to increase, while the introduction of network communications, wearable, WiFi6, display and other industry leading customers. In the field of automotive electronics applications, after the completion of the first Grade1-level large-capacity EEPROM AECQ100 examination and verification, a number of EEPROM, NOR and NAND products have entered the AEC-Q100 assessment one after another, gradually expanding the coverage of automotive specification-level products.
Smart meter chip is growing at a high speed, and the general MCU platform is in its infancy. In the first half of 2022, the company's intelligent meter product line achieved revenue of about 276 million yuan, a substantial increase of 177.86% over the same period last year, mainly due to the improvement of the supply chain, the overall sales increased compared with the same period last year, and the company's new products mass production, price adjustment and smart meter dedicated MCU chip market share is high, making the company's overall smart meter chip sales and sales margin achieved considerable results. At present, the company's MCU has made good progress in the general field, has been involved in public utilities, smart appliances, smart home, new energy and other application scenarios, and achieve mass production. The company's first specification-grade MCU product has completed the AEC-Q100 assessment and entered the market promotion, product performance and quality are generally recognized by customers, and is expected to enter the stage of mass production in the second half of 2022.
Investment suggestion: the company's annual return net profit in 2022-23-24 is expected to be 9.82max 13.66 / 1.865 billion yuan respectively, and the corresponding current price PE is 53-38-28 times, the company is the leading domestic large IC design company, FPGA and other highly reliable businesses are leading in domestic technology, and are in the stage of rapid growth, maintaining the "recommended" rating.
Risk hints: the risk of downstream market fluctuations; the risk of intensified market competition; R & D progress is not as expected.