2021-11-30 Fang Jingjing and Tong Qiutao of Xinda Securities Co., Ltd. conducted a research on Shilan Wei and released a research report entitled "Equity incentive boosts morale, just in time for product upgrading". This report gives a buy rating to Shilan Wei, and the current share price is 62.89 yuan.

Shilanwei (600460)
Event: Shilan Wei today issued an equity incentive plan to grant 21.5 million stock options, corresponding to 21.5 million shares, accounting for 1.52% of the total share capital.
Comments:
This is the company's first equity incentive scheme in more than a decade! In the early stage, the market thinks that the incentive mechanism of the company is not flexible enough and it is not easy to retain talents. And this equity incentive release, effectively broke the early market doubt! And wide coverage, high performance requirements of the exercise conditions, help to bind the interests of employees with the overall interests of the company, and enhance the cohesion and centripetal force of the company.
Wide coverage motivates employees: the total number of people encouraged this time is 2467, and the proportion of total employees covered is as high as 40.05%. In addition to Li Zhigang and other three senior executives, the other 2464 middle managers and core backbones have been granted a total of 20.06 million shares, with an average holding of 8100 shares. based on the closing price of 59.57 yuan on November 29th, the current per capita shareholding market value is as high as 485000 yuan.
The performance appraisal target shows confidence: according to the growth rate index set by the exercise assessment, it is estimated that the revenue in 21-24 years will not be less than 69.35MB 90.32max 100.59 / 11.087 billion yuan, of which the year-on-year growth rate in 21 / 22 will reach 62%. 30%. In addition, from the exercise price, the exercise price of the stock option granted by the company for the first time is 51.27 yuan per share, which is close to the current stock price, which also shows the confidence that the company continues to improve. IGBT and other high-end products have been upgraded steadily, with huge production capacity to ensure supply. In terms of the progress of IGBT, the company comprehensively develops the market of household appliances, automobiles, industrial control and photovoltaic wind power. At present, the IPM module of home appliances is fully replacing Japanese manufacturers, and the company plans to double its production capacity in 22 years; industrial control into Huichuan, Inviton and other supplies; car IGBT in Lingdian electric control, zero running and other batches, and has verified cooperation with domestic mainstream car companies; photovoltaic has also been in deep cooperation with major customers such as Sunshine. It is particularly noteworthy that the company added 20, 000 12-inch wafers in 22 years, all of which will be used for IGBT, and revenue is expected to exceed expectations with the progress of follow-up customer verification.
Profit forecast and investment rating: Shilan Micro, as one of the leading power IDM companies in China, has a prominent capacity advantage and fully benefits from the high-profile demeanor of the industry. However, more attention should be paid to the fact that at this opportunity, the company makes every effort to promote the upgrading of high-end products, and the business progress of IGBT, MEMS and the third generation semiconductors is steady, and the growth potential is worth looking forward to. We estimate that the return net profit of the company from 2021 to 2023 is 1.039 billion / 1.342 billion / 1.846 billion respectively, and the corresponding PE is 84-65-47 times. Maintain a "buy" rating on the company.
Risk factors: the risk of cyclical fluctuations in the industry, the risk of less than expected technology iterations, the risk of capacity climbing and the risk of less than expected customer development.

A total of nine agencies have rated the stock in the last 90 days, including eight buy ratings and one overweight rating; the average institutional target price in the past 90 days is 78.35; according to the Securities Star valuation analysis tool, the good company (600460) has a rating of 3 stars, a good price rating of 1 star and a comprehensive valuation rating of 2 stars. (rating range: 1-5 stars, up to 5 stars)