Event: the company released its 2022 semi-annual performance report, with operating income of 1.702 billion yuan during the performance period, an increase of 50.83% over the same period last year, and a net profit of 531 million yuan, an increase of 172.99% over the same period last year. Net profit after deducting non-return was 519 million yuan, an increase of 220.88% over the same period last year.
The company's performance increased significantly in the first half of the year, and the volume of highly reliable business led to an improvement in profitability. The company's Q2 achieved revenue of 927 million yuan in a single quarter, an increase of 47.85 percent over the same period last year, an increase of 19.5 percent over the same period last year, and a net profit of 298 million yuan, an increase of 175.68 percent, an increase of 27.9 percent, and a non-return net profit of 293 million yuan, an increase of 223.28 percent and 29.6 percent over the same period last year. Benefiting from product structure adjustment, new product launch and price adjustment, the company's comprehensive gross profit margin increased by 9.77% in the first half over the same period last year, of which the gross profit margin in the second quarter was 66.18%, an increase of 2.59% compared with the same period last year.
In the first half of the year, the company paid about 73.6986 million yuan in share fees for the equity incentive scheme, which was included in recurrent profit and loss, an increase of 73.044 million yuan over the same period last year.
The industry is booming and multi-business growth, and there is a broad space for FPGA replacement. In the first half of 2022, the company's business grew rapidly, sub-business: 1) Security and identification chip: revenue in the first half of the year was about 461 million yuan, an increase of 23.57% over the same period last year.
The company is the leading chip supplier of RFID, smart card, security module and NFC products in China. At present, on the basis of continuing to maintain the competitive advantage of smart card chip products, we are actively expanding to perceiving RFID chips and anti-counterfeiting applications, Internet of things security, NFC application solutions and so on. In addition, we have actively developed the application scenarios of automotive specification-level products, and mass-produced and landed in projects such as TBox security chips and car digital keys. 2) non-volatile memory: the company's products mainly include EEPROM,NOR Flash and SLC NAND Flash, etc., with revenue of about 487 million yuan in the first half of the year, an increase of 33.8% over the same period last year. The main progress includes the introduction of leading customers in the industries such as network communications, wearable, WiFi6, display screen, etc., and a number of projects in the field of automotive electronics applications have successfully entered the application stage. In the downward environment of the market boom, the downstream demand in the highly reliable field is strong, and orders are growing rapidly. It is expected that the company will continue to maintain steady performance growth through customer structure optimization in the second half of the year; 3) Smart meter chips: revenue in the first half of the year is about 276 million yuan, an increase of 177.86% over the same period last year. Continue to maintain a leading share in the field of single-phase smart meter MCU for the State Grid. During the reporting period, the company's first car specification-level MCU completed the AEC-Q100 assessment and entered the market promotion, product performance and quality were generally recognized by customers, and is expected to enter the stage of mass production in the second half of 2022. 4) FPGA and other chips: revenue in the first half of the year reached 378 million yuan, a sharp increase of 120.84% over the same period last year. 100 million-level FPGA chip technology tends to mature to meet the expectations of end customers, and demand continues to increase.
The company is one of the leading manufacturers in the field of FPGA in China, and the process of domestic substitution is accelerated with technological breakthroughs. At present, the company can provide 10 million gate level, 100 million gate level FPGA chips and PSoC and other products, the main promotion of 28nm product penetration continues to increase, as the company actively coordinate production capacity to meet downstream demand, 2022 is expected to high growth.
Investment suggestion: considering that the company is one of the leading manufacturers in the domestic FPGA field, and its downstream order performance has greatly increased, we raised the 2022 FPGA net profit in 2023 to RMB 9.82 billion, respectively (the previous value is 8.10 pound, 10.49 billion), and corresponding to the PE in 55-41-33, the company is one of the leading manufacturers in the mainland FPGA industry. Under the background of localization, the downstream demand is strong. The product structure is continuously optimized, with both scarcity and growth, up to "buy".
Rating.
Risk tip events: FPGA market demand and prosperity may be less than expected, product price decline risk, upstream raw material price rise risk.