Revenue and profits increased rapidly in the first half of 2022: the company achieved revenue of 1.7 billion yuan in the first half of 2002, an increase of 50.8% over the same period last year. The operating income of each product line is RMB 460 million for security and identification chips, RMB 490 million for non-volatile memory, RMB 280 million for smart meter chips, RMB 380 million for FPGA and other chips, and RMB 100 million for testing services. Gross profit margin rose sharply to 65 per cent from 55.2 per cent last year, mainly due to higher overall chip prices and high gross margin FPGA revenue growth. Operating profit was 540 million yuan, an increase of 150% over the same period last year. The net profit was 530 million yuan, an increase of 173% over the same period last year. The non-return net profit was 520 million yuan, an increase of 220.9% over the same period last year.
The return to the mother earned 0.65 yuan per share, compared with 0.28 yuan in the same period last year. The company's revenue and profit for the current period exceeded our previous forecast. At the same time, the R & D expenditure in the same period was 370 million yuan, and the R & D expenditure rate was 22%, a decrease of 5.1% over the same period last year.
MCU product line continues to expand: revenue of smart meter MCU products increased 179% in the first half of the year compared with the same period last year, mainly due to the increase in shipments of smart meter MCU. In the first half of the year, the company completed the development and streaming of the 12-inch 55nm and 90nm embedded flash memory process platform, and promoted the specification-level MCU to obtain ACE-Q100 certification. We believe that in the current market lack of core environment is a better opportunity to expand the market for the company's automotive MCU, 22H2 will continue to launch a variety of IoT, high-performance industrial and automotive MCU, to achieve a complete layout of 12-inch and 8-inch process platforms, further enrich the product lineup, expand the market share of key industries such as public utilities, industry, white goods and automobiles, and drive revenue to continue to grow.
There is room for FPGA growth: the company's sales of FPGA and other chips in the first half of the year were 380 million yuan, up 121% from a year earlier. At the same time, the company's PSoC Azure Dragon products have been sold, and 14/16nm 's 1 billion door-level FPGA products are also under research and development as planned, equipped with APU, GP and other IP cores, and is expected to produce sample films this year and 23 years later. We believe that in the future, under the premise of meeting the needs of the highly reliable market, the company will gradually enter the consumer market. At present, the customers of PSoC products are still in the design and testing stage, and they have not yet been shipped on a large scale, and their FPGA products still have a lot of room for growth. At the same time, high unit price FPGA products will continue to increase the company's gross profit margin.
Target price of HK $50.00 and maintain buy rating: we expect the company's revenue over the next three years to be RMB 347 billion 40.3 billion and corresponding net profit of RMB 1.31 billion 1.32 billion. Using the PE valuation method, the company is given a target price of HK $50.00, corresponding to 35 times PE of 2022 profit, with 37.4% room to rise compared with the current price, maintaining the buy rating.
Risks: product sales are not as good as expected, product capacity is affected by the epidemic, and Sino-US relations are at risk.