AVIC Science and Technology Innovation Board Investment Manual IX-China Resources Micro (688396): Science and Technology Innovation Board Red Chip First Domestic Semiconductor IDM Leader

AVIC Science and Technology Innovation Board Investment Manual IX-China Resources Micro (688396): Science and Technology Innovation Board “Red Chip” First Domestic Semiconductor IDM Leader

Key points of investment China Resources Group’s semiconductor investment operation platform, the first stock of the “red chip” science and technology board.

The company’s predecessor, CSMC, was established in 2003. After decades of development, it is currently the leading semiconductor company in the country with chip design, wafer manufacturing, packaging and testing and other integrated industrial chain management capabilities.

The company is a semiconductor investment and operation platform of China Resources Group. Its main business is divided into two business segments: products and solutions, manufacturing and services.

The product and solution business segment focuses on the fields of power semiconductors, smart sensors and intelligent control. It is mainly operated by subsidiaries such as China Resources Huajing, Chongqing Huawei, China Resources Silicon, China Resources Silicon Power, and China Resources Semiconductor. Manufacturing and service businesses mainly provide semiconductor openness.Services such as wafer manufacturing and packaging testing are mainly operated by the holding subsidiaries of China Resources Shanghua, China Resources Ansheng and China Resources Semico.

After the successful listing, the company will become the first red chip of the science and technology board.

Semiconductors are the core of the electronics industry, and demand drives the industry’s size to grow steadily.

Semiconductors are in the midstream of the industry, including the three core serials of chip design, wafer manufacturing and packaging testing, which are the core of the entire electronics industry. With the rapid development of the emerging consumer electronics market represented by smartphones, tablets, and wearable devicesAs well as the rise of technology industries such as automotive electronics, industrial control, and the Internet of Things, the size of the semiconductor industry has grown steadily.

The domestic domestic semiconductor industry started late, but with the combination of factors such as policy support, market traction and capital promotion, the market size has grown rapidly.

In the future, a new round of technologies such as 5G, AI, the Internet of Things, and autonomous driving will gradually move toward industrialization, and the increase in autonomous and controllable demand brought about by trade frictions. In the future, the semiconductor industry is expected to usher in a golden age of import substitution.

Leading domestic semiconductor IDM, leading in manufacturing technology and resources nationwide.

The company is a local semiconductor IDM leader, benefiting from the company’s entire industry chain’s operating capabilities, it can have a converted product conversion speed and stronger production line coordination capabilities, can better leverage the advantages of internal integration of resources, and improve operational management efficiency.

The company has the nation’s leading semiconductor manufacturing process level and resources. Currently it has 6-inch wafer manufacturing capacity of about 2.47 million wafers / year, 8-inch wafer manufacturing capacity of about 1.33 million wafers / year. The world’s leading BCD process technology level and MEMS processes etc.Leading domestic packaging technologies such as wafer manufacturing technology and IPM module packaging.

It will benefit from rising downstream demand and import substitution dividends.

At present, the global semiconductor industry is undergoing a process of transferring to mainland China. With the encouragement and promotion of national industrial policies and active social capital, domestic enterprises have continuously improved their research and development capabilities through independent development, conquered new technologies, introduced new products, and seized market share.Achieve import substitution.

In the future, through the continuous maturity of new technologies such as the Internet of Things, 5G communications, artificial intelligence, etc., the industrial upgrading process of major downstream manufacturing industries such as consumer electronics, industrial control, and automotive electronics will accelerate.

The innovation and upgrading of the downstream market has driven the scale growth of semiconductor companies, and new opportunities for the development of the domestic semiconductor industry will emerge.

Through independent research and development, the company has mastered core technologies with 成都桑拿网 independent intellectual property rights in the main business areas. Most of the core technologies are domestically leading. In the future, domestic substitution of MOSFET products and IGBT devices will promote the company’s competitiveness.

The profit forecast of the semiconductor industry has improved. The global semiconductor industry has entered a downward cycle in the fourth quarter of 2018. Starting in the third quarter of 2019, due to the growth of downstream application markets such as 5G, the prosperity of the semiconductor industry has rebounded. In 2020, it will be affected by new-type coronavirus pneumonia.The impact of the epidemic situation is expected to have a significant impact on the first quarter performance, and the two-year performance in 2019 and 2020 is expected to show a slight shift.

However, in 上海夜网论坛 the long run, the semiconductor industry is the core of the electronics industry chain. With the expansion of downstream application fields and the continuous advancement of the world’s industrial transfer, the subsequent import substitution space of the semiconductor industry will be conducted, and the market will be broad.Benefit from increased downstream demand and market space brought by import substitution.

We expect the company’s operating income for 2019-2021 to be 568,098.

150,000 yuan, 539,504.

800,000 yuan and 598,001.

890,000 yuan, the growth rate is -9.

41%, -5.

03%, 10.

84%, net profit attributable to mothers was 36,240.

20,000 yuan, 41,387.

410,000 yuan and 49,763.

480,000 yuan, the growth rate was -15.

61%, 14.

2%, 20.

24%, EPS is 0.

3 yuan, 0.

34 yuan and 0.

41 yuan.

From the company’s financial data, the growth rate of revenue and net profit has declined, but the company’s gross profit margin, net profit margin are relatively stable, and the financial quality is high. In addition, the company’s patents and products are in the leading position in the industry. We believe that PE estimates can be used.law.

At present, listed companies in the same industry include Silan Microelectronics, Huawei Electronics, Yang Jie Technology, and Hua Hong Semiconductor and SMIC in Hong Kong stocks, with an average PE of 130.

32.The domestic semiconductor industry is estimated to be relatively high. Considering the high performance of the science and technology board investment gate, its liquidity is in the main board market in the long run. We give an appropriate discount based on the PE estimates of comparable listed companies.100X rooms, combined with the full year 2019 revenue of 0.

3 yuan / share, the company’s reasonable expected range is 24-30 yuan.

Risk reminders: (1) The industry gradually fluctuates risks.

The semiconductor industry has offsetting characteristics and is closely related to the macro economy. If the macroeconomic changes are contradictory or are in a long-term trough, the market demand of the semiconductor industry will also be affected, which will affect the profitability of the semiconductor industry companies.

(2) Industry competition and technology R & D risks.

At present, the company has technological gaps with leading international manufacturers such as Infineon and ON Semiconductor in terms of research and development strength, process accumulation, product design and manufacturing capabilities, and brand awareness in some high-end markets.

With the growth of the leading foreign semiconductor companies in the Chinese market, in an increasingly fierce market competition environment, if the company cannot continue to upgrade its technology, improve product performance and service quality, reduce costs and optimize its marketing network, the company’s products will lose market.Competitive risks.