On January 19, 2022, Wu Jisen and he Hao of Guohai Securities Co., Ltd. conducted research and issued a research report "performance Forecast Review: performance guidance in 2021 exceeds expectations, three-wheel drive rapid growth". The current share price is 116.88 yuan.

Lionwei (605358)
Events:
The company issued an announcement of pre-increase in 2021: the net profit of 2021 is expected to be 590 million yuan to 640 million yuan, an increase of 192.14 to 216.90% over the same period last year. The non-return net profit is expected to be 547 million yuan to 597 million yuan, an increase of 264.20% to 297.49% over the same period last year.
Main points of investment:
2021 performance guidance exceeded expectations, high prosperity in the industry + capacity advantage + product structure optimization, the company's performance is growing rapidly. The company's 2021Q4 achieved a net profit of 1.86-236 million yuan in a single quarter, an increase of 161.77%, 232.39%, and-4.62% to 21.03%, respectively, mainly due to: 1) the company earlier laid out and completed the construction of a new 6amp 8-inch wafer production line, realizing the technical transformation of the production line of the power device chip manufacturing line, and under the background of hot market demand, the company's production and sales were booming, driving performance growth. 2) further optimize the company's product structure, continuously increase investment in new product research and development, promote the development of high-quality customers, and increase cooperation with strategic customers 3) the company has made remarkable achievements in technological improvement, yield improvement, cost control, etc., reducing costs and improving production capacity and quality at the same time. In addition, the company timely adjusts product prices according to market supply and demand and cost changes to enhance the company's profitability.
With a fixed increase of 5.2 billion yuan, we are optimistic about the growth of the company under the trend of domestic substitution and prosperity. As a leading manufacturer of semiconductor wafer + power device + compound semiconductor RF chip in China, the company has strong technical strength and multi-point blooming in research and development. In terms of silicon wafers, after early customer expansion and product verification, the technical capabilities of the 12-inch wafers have covered the logic circuits of the technical nodes above 14nm, and the image sensor and power device chips have covered all the customers' technical nodes and have been shipped on a large scale; the production and sales of 8-inch wafers 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-level power device chips and photovoltaic bypass diode control chips have increased significantly. Compound semiconductor RF chips, the company has built 70,000 pieces / year of gallium arsenide radio frequency chip production capacity and has achieved mass shipments, in Haining base has 360,000 pieces / year of RF chip products (including GaAs RF chips 180,000 chips, SiC-based GaN chips 60,000 chips, VCSEL chips 120,000 chips) planning layout. The company has landed on the ground, and the total amount of funds raised is 5.2 billion yuan. The increase is used for projects with an annual output of 1.8 million 12-inch silicon wafers for integrated circuits, 720,000 6-inch power semiconductor chips and 2.4 million 6-inch silicon epitaxial wafers. The company's investment will help to break through the capacity bottleneck, in the context of downstream economic demand, superimposed domestic substitution, the company is expected to continue to expand market share and accelerate growth in the future.
Profit forecast and investment rating: Lion Micro, as a rare complete industrial chain platform with the manufacturing capacity of silicon wafers and power devices, has a strong competitive advantage in industrial chain integration, technology research and development, product customers and other aspects. at the same time, the layout of compound semiconductor RF OEM field has achieved remarkable results. With the expansion of downstream wafer factories and the expansion of demand in new energy vehicles, 5G, industrial control and other fields, superimposing the general trend of domestic substitution under the background of self-control, the domestic foundry of semiconductor wafers, power devices and RF chips is on the rise. We believe that the company has strong core competitiveness, based on traditional advantages, plus code layout in the field of large silicon wafers and power devices, and cut into the RF contract manufacturing market of compound semiconductors, which is expected to rise in the wind and grow rapidly. We raise our profit forecast and estimate that the company's net profit from 2021 to 2023 will be RMB620,000,000 / 1.52m / 1.73m respectively, corresponding to EPS 1.35pm 2.06pm 2.57RMB / share, and the valuation of PE before that is 89-58-47 times, maintaining the "Buy" rating. The company is expected to achieve a net profit of RMB620,000,000,000 (+ 1.52m) / 1.73m (+ 179m), respectively, and maintain a "buy" rating.
Risk hint: downstream demand is less than expected risk; the company's new product research and development progress is not as expected as expected risk, and new product introduction progress is not as expected as expected risk.

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 148.73; 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)