2021-10-27 Li Renbo and Li Hongtao of Pacific Securities Co., Ltd. conducted research on Ziguang Guowei and released a research report, "profit is close to the forecast limit, and gross profit margin has increased significantly." this report gives a buy rating to Ziguang Guowei. It is believed that its target price is 296.00 yuan, and the current share price is 197.22 yuan, with an expected increase of 50.09%.
Ziguang Guowei (002049)
Event: the company released its third quarterly report for 2021. In the first three quarters, the revenue was 3.79 billion yuan (YOY+63.33%) and the net profit was 1.457 billion yuan (YOY+112.90%), which was close to the upper limit of the forecast. EPS is 2.40 yuan.
The demand for special orders is full, and the gross profit margin continues to increase. 2021Q3 achieved an operating income of 3.79 billion yuan (YOY+63.33%) and a net profit of 1.457 billion yuan (YOY+112.90%), close to the upper limit of the forecast. Q3 achieved a revenue of 1.497 billion yuan (YOY+74.93%) in a single quarter and a net profit of 582 million yuan (YOY+105.87%). The gross profit margin further increased to 59.87%, an increase of 5.31 percentage points over the same period last year, and an increase of 2.85 percentage points compared to Q2. Due to the increase in advance payment for R & D services and products, the company's contract liabilities totaled 223 million yuan, an increase of 47.48 percent over the beginning of the year.
The rapid growth of revenue and net profit is mainly due to: (1) the strong demand and full orders in the downstream of the various industries in which the company is located; (2) the strong competitiveness of the company's special integrated circuit business products, high customer recognition, and a substantial increase in demand and production capacity; at the same time, Ziguang creates FPGA products, and the delivery capacity continues to improve; and (3) the revenue of intelligent security chip business is growing rapidly, with a significant improvement in profitability. The demand for special integrated circuits continues to break out and is still expected to maintain high growth. Special microprocessors and supporting chipsets continue to be launched; the new generation of 2x nanometer high-capacity and high-performance FPGA products have been widely recognized in the market, continue to maintain a leading position, and gradually improve their delivery capacity; special memory products maintain a huge market leading edge. Other products in the network bus, interface market share are in the lead.
We believe that: 1 the explosive growth of special demand, the compound growth rate of the military aircraft business is forecast to exceed 50% in the next three years, and the compound growth rate of the missile business is forecast to exceed 60% in the next three years. 2due to the impact of the epidemic in the first half of 2021, the company's Shijiazhuang plant had gaps such as tubes and shells, and its production capacity had been fully replenished in the second half of the year. 3 company associate Ziguang Tongchuang FPGA products to achieve large-scale delivery capacity, in-hand orders of more than 1 billion yuan. The upgrading of the company's product delivery capacity is expected to meet the order growth and further consolidate the performance.
Smart card chips are growing rapidly and orders continue to grow. The layout of the company's telecom chip products is complete, and it will usher in a huge development opportunity in the 5G era. Won the bid China Mobile Limited 111.4 million super SIM card product collection project, China Mobile 7000 million pieces of eSIM strategic order, super SIM card sales in more than 23 provinces and cities in China. The rapid growth of shipments in overseas markets in the field of mobile phone SIM has gradually eroded Samsung's share and become the mainstream of the market. At the same time, breakthroughs have been made in financial payment security products, car specification-level security chips, convertible bond raising projects, high-end security chips and vehicle controller chips.
We believe that the company's smart card chip business will continue to maintain rapid growth, mainly due to:
1 Samsung abandoned the overseas SIM card market, and the company filled the overseas market space. 2 won the bid to move 114 million pieces of 5Gsim card chip order, 7000 million pieces of eSIM strategic order. (3) the amount of super SIM card is gradually increased.
Investment suggestion: Ziguang Guowei is a leader in special chips, with rapid growth of orders, rapid expansion of super SIM business, and domestic alternative opportunities for vehicle controller chips. We are optimistic about the company's long-term growth. Maintain the forecast company's 2021-2023 homing net profit of 1.76 billion / 2.62 billion / 3.62 billion yuan respectively, corresponding to the EPS score of 2.90, 4.32, 5.97, maintain the "buy" rating, the target price is 296 yuan.
Risk hint: the growth of special chips and super SIM cards is not as expected, and the research and development of FPGA is not as expected.
A total of 22 agencies have rated the stock in the last 90 days, including 19 buy ratings and 3 overweight ratings; the average institutional target price in the past 90 days is 266.51; according to the Securities Star valuation analysis tool, Ziguang Guowei (002049) has a good company rating of 3.5 stars, a good price rating of 1.5 stars and a comprehensive valuation rating of 2.5 stars.