Zhaoyi Innovation (603986): 19-year profit meets expectations. Look at TWS headset + Internet of Things in 2020.
Investment Highlights: The company expects to return net profit of RMB 600 million-6 in 2019.
500 million, in line with market expectations.
The company announced the 2019 annual results pre-announcement and expects to achieve net profit in 20196.
10 billion to 6.
50 ppm, an increase of 1 from the same period in 18 years.
9.5 billion to 2.
45 ppm, an increase of 48 per year.
15% to 60.
Net profit after deduction is approximately 5.
28 to 5.
78 ppm, an increase of 1 from the same period last year.
67 to 2.
1.7 billion, an increase of 46 every year.
26% to 60.
We judge that the company’s profit is basically in line with market expectations (the company added new orders for Airpods Pro in Q4, and the market expectations have been raised).
In 2020, new demand for downstream TWS headphones is coming.
The NOR Flash chip is widely used in mobile phones, PCs, DVDs, USB keys, set-top boxes, network equipment and IoT equipment.
AMOLED, TDDI, automotive electronics, TWS headsets downstream and downstream customers supplement demand.
The characteristic of NOR is execution in chip (XIP, eXecute In Place). Such applications can run directly in the flash memory without having to read the code into the system RAM.
The advantage is that you can run programs directly from the flash.
Therefore, AMOLED and TDDI are expected to bring more than US $ 200 million in market demand in 19 years. At the same time, high-end NOR FLASH is applied to TWS headsets. Airpods Pro requires two 128MB NOR FLASH for noise reduction.In the market competitive environment of enterprises and institutions, Zhaoyi Innovation is the core supplier.
We judged that the increase in sales of TWS headsets, and the growth of NOR FLASH by a single headset is expected to be close to $ 100 million in 2020.
The storage market has ample space, and the company stands firm in its main business and expands the DRAM market.
According to Web-Feet Research data, the global flash memory market sales in 2017 were approximately US $ 53.4 billion, of which the global sales of NOR Flash products was approximately US $ 2.5 billion, and the company ranked fifth in the world with a market share of 10.
5%, the top four are Micron, Wanghong, Cypress and Winbond.
In the serial NOR Flash product market, the company ranked third in the world, and the first two were Winbond and Wanghong.
The number of MCU sales particles has increased 佛山桑拿网 significantly, opening the door to the Internet of Things.
In mid-2019, the cumulative volume expansion of MCU has exceeded 300 million. The company is a domestic 32-bit MCU product leader. GD32 MCU has more than 320 product models, 22 product series and 11 different package types.
The price advantage over the opponent is obvious, the investment volume has increased significantly, and the gross profit margin is stable.
The company’s profits began to materialize, maintaining the company’s “overweight” rating.
Taking into account that the MCU and DRAM have exceeded expectations, we have raised the company’s net profit in 2019 from 4.
2.9 billion to 6.
3.4 billion (the company added Airpods Pro orders in Q4, the market expectation has been raised), raising the net profit attributable to mothers in 2020/2021 from 5.
11 billion / 6.
1.3 billion to 8.
7.3 billion / 11.02 billion.
Using the relative estimation method, considering that the company is in the storage industry with fewer participants and more outstanding companies, refer to the 20-year PE average change of Shengbang Co., Ltd. 117 times.We give a PE valuation of 110 times in 2020, corresponding to the company’s target city conversion of 96 billion, and give an “overweight” rating.
Risk reminder: slow fulfillment of new demand, etc.