Shanghai Fudan is a professional company engaged in the design, development and provision of system solutions for VLSI. Benefiting from actively opening up the market and continuously optimizing the product structure, the company achieved a revenue of 1.7 billion yuan (RMB, the same below) in the first half of 2022, an increase of 50.8% over the same period last year; the net profit attributable to shareholders of listed companies was about 530 million yuan, an increase of 173.0% over the same period last year; and the net profit after deducting non-recurring gains and losses belonging to shareholders of listed companies was about 520 million yuan, an increase of 220.9% over the same period last year.

The proportion of FPGA chip revenue continues to increase, and it is expected to continue to contribute high profits in the future: FPGA (Field Programmable Gate Array), as a semi-custom circuit chip specially used in the field of integrated circuits, has a broad application prospect in the field of 5G communications and artificial intelligence. Shanghai Fudan is a leading company in the field of FPGA in China, and its core technology has significant competitive advantages. In recent years, the company's FPGA business has developed rapidly, with revenue of about 380 million yuan in the first half of 2022, an increase of about 120.8% over the same period last year; revenue accounted for 22%, an increase of about 7% over the same period last year; the business is profitable, with a gross profit margin of 84.9% in 2021. At present, FPGA is the company's main business innovation development direction, and the total R & D expenditure is expected to account for about 29.4%. In the future, it is expected to empower each other with PSoC business, superimpose its ultra-high profit margins, and become the main growth point of the company's profits.

The main business is stable, and the non-volatile memory business is growing steadily: in the first half of 2022, the company's non-volatile memory business income reached 490 million yuan, accounting for 28.8% of the total revenue.

The company also has the design and mass production capacity of EEPROM, NOR Flash and SLC NAND Flash products, and the physical performance limits of this device are basically reached in the fields of EEPROM and NOR Flash, which are at the same level at home and abroad. The company's customer resources are of high quality and have good prospects for development. In the field of EEPROM, there are customers such as 300750.SZ and 300750.SZ (00175.HK), and customers such as Qualcomm Inc (QCOM.US), Broadcom Ltd (AVGO.US) and MediaTek in NOR Flash. In the future, the company's non-volatile storage business is expected to develop with customers, and profits will further increase.

Investment advice: the recent promulgation of the 2022 Chip and Science Act of the United States has once again strengthened the logic of the localization of the semiconductor industry chain. The company as a leader in related fields, high technological autonomy, future performance is expected to continue to grow, recommended to buy.