2022-01-18 Tianfeng Securities Co., Ltd. Pan Min conducted research and released a research report entitled "three-wheel drive of the core high-quality track, high performance growth in 2021". This report gives a buy rating to Anwei, and the current share price is 119.91 yuan.

Lionwei (605358)
Event: the company issued an announcement of pre-increase in performance in 2021; the net profit is expected to be 590 million yuan to 640 million yuan in 2021, an increase of 192.14 to 216.90% over the same period last year. It is estimated that the non-net profit deducted is 547 million yuan to 597 million yuan, an increase of 264.20% to 297.49% over the same period last year.
Comments: Silicon wafer + discrete devices + RF chip, three-wheel drive can be expected in the future. The reasons for the company's pre-outstanding performance in 2021 include: 1) the company laid out and completed the construction of new 6 -, 8-and 12-inch silicon wafer production lines earlier, and implemented the capacity improvement of the power device chip manufacturing line. More fully meet the current hot market demand, the company's production lines are running at full capacity. 2) continuously increase the development of new products and new technologies, continue to promote the development of high-quality customers, and increase cooperation with strategic customers to further optimize the product structure. 3) through management promotion and lean production, remarkable achievements have been made in technological improvement, yield improvement and cost control and savings, which effectively improve production capacity and quality, reduce costs, and enhance the company's profitability; 4) the company timely increases the price of products according to the market supply and demand situation and the purchasing cost changes of raw materials and auxiliary materials.
It is optimistic that the company will continue to benefit from the "semiconductor wafer + discrete devices" industry Gaojing demeanor + domestic replacement opportunities. With the improvement of the prosperity of the industry, thanks to the accelerated domestic substitution of semiconductors and the continuous increase in downstream demand driven by the rapid development of intelligent economy, the company's 8-inch wafer market share has risen steadily. With the rapid development of new energy vehicles, AI, Internet of things and other application fields, semiconductor wafers and discrete devices have broad prospects for future development. According to SEMI, global wafer shipments will reach 12.5 billion square feet in 2021, an increase of 5 per cent year-on-year, and will reach 13.2 billion square feet in 2022, an increase of 5.3 per cent year-on-year. Benefiting from the support of national industrial policy, the proportion of sales revenue of China's semiconductor discrete device industry in the world is increasing year by year, and the market scale is growing steadily. Power semiconductors are growing rapidly in various application fields: on the one hand, the rapid growth of new energy vehicles, on the other hand, the rapid growth of clean energy business, the demand for semiconductor power devices is driven by the two businesses. in addition, there are more and more new electronic and intelligent application scenarios. On the whole, we believe that the market boom of the power semiconductor industry continues to be maintained. The company has earlier laid out and completed the construction of a new 6-inch and 8-inch silicon wafer production line, and implemented the capacity improvement of the power device chip manufacturing line, which is expected to benefit from the market space brought by the semiconductor business cycle and import substitution.
Continuously increase the development of new products and new technologies so that the company has a long-term competitive advantage. The company continues to optimize the product structure: in terms of 12-inch silicon wafers, after early customer expansion and product verification, the technical capability has covered the logic circuits of the technical nodes above 14nm, and the image sensor and power device chips have covered all customers' technical nodes and have been shipped on a large scale. As of November 2021, the company's 12-inch wafer production capacity is 20, 000 wafers per month, and the company's 12-inch wafer production capacity reached 150000 wafers per month by the end of 2021. At present, the 12-inch silicon wafer production capacity of 20,000 wafers per month on the one hand has achieved large-scale shipments, on the other hand, it is also continuing to carry out customer verification work; in terms of 8-inch silicon wafers, production and sales have been further enlarged and the market share has been further increased; in terms of semiconductor power device chips, the production and sales of automotive gauge-grade power device chips and photovoltaic bypass diode control chips have increased significantly. In terms of compound semiconductor RF chips, production and sales have also increased steadily. At present, the company's subsidiary Liang Dongxin is mainly engaged in the contract manufacturing of gallium arsenide radio frequency chips. at present, it has built a production capacity of 70,000 pieces per year and has achieved batch shipments. The company has 360000 pieces / year of RF chip products in Haining base (including gallium arsenide radio frequency chip 180000 / month, silicon carbide-based gallium nitride chip / month, VCSEL chip 120000 / month) planning and layout, is still in the planning stage, the company will start the construction of Haining base as soon as possible according to the company's actual situation and administrative examination and approval.
5.2 billion fixed growth and landing, continue to increase investment in silicon wafers + power semiconductors + silicon epitaxial wafers. The company raised a total of 5.2 billion yuan and invested in the technical transformation project of 1.8 million 12-inch silicon wafers for integrated circuits, 720000 6-inch power semiconductor chips, 2.4 million 6-inch silicon epitaxial wafers and supplementary liquidity. The company will enrich the range of products, expand product capacity, improve the industrial layout, and enhance the overall competitiveness. Specifically, it will increase its market share in the mainstream market of semiconductor wafers, significantly increase the production capacity of Schottky power diode chips in grooves, and consolidate its leading position in the market of wafer products up to 8 inches.
Investment advice: based on the company's long-term growth momentum under the high demand in the semiconductor wafer and discrete device industry and the domestic alternative logic, we raise our forecast for 21-22-23 annual net profit from 5.3 / 820 million yuan to 6.3 shock 9.3 / 1.28 billion yuan, maintaining the "buy" rating.
Risk hint: the performance pre-increase data are only preliminary accounting data, and the specific and accurate financial data are based on the 2021 annual report data officially disclosed by the company, the concentration of sales regions, the rise in labor costs, the aggravation of the epidemic situation, and the loss of R & D technical personnel.

A total of 11 agencies have rated the stock in the last 90 days, including 10 buy ratings and 1 overweight rating; the average institutional target price in the past 90 days is 148.65; according to the Securities Star valuation analysis tool, Lionwei (605358) has a good company rating of 3 stars, a good price rating of 0.5 stars and a comprehensive valuation rating of 2 stars. (rating range: 1-5 stars, up to 5 stars)