Huaxin Securities: weil shares to buy rating


MAO Zheng and Liu Yu of Huaxin Securities Co., LTD conducted research on Weil shares and released a research report “Performance meets expectations, Vehicle CIS and TDDI lead long-term growth”. This report gives a buy rating on Weil shares, and the current share price is 254.2 yuan.Weil Shares (603501) Event Weil Shares issued 2021 annual results forecast:It is expected that the net profit of returning to the mother in 2021 will be 4.468 billion yuan – 4.868 billion yuan, up 65.13%-79.91% year on year, and the net profit of returning to the mother after deduction will be 3.918 billion yuan – 4.268 billion yuan, up 74.51%-90.10% year on year.According to the company’s 2021 annual performance forecast estimates, the company in 2021 Q4 is expected to realize the mother net profit of 950 million yuan – 1.35 billion yuan, year-on-year growth of -3.06%-37.76%, sequential growth of -25.43%-5.97%;The net profit of withholding non-returning parent was 850 million yuan to 1.2 billion yuan, with a year-on-year growth of 28.98%-82.09% and a sequential growth of -22.87%-8.89%.The company’s performance growth is mainly benefited from the company’s continued optimization of the market layout in 2021, in-depth cultivation of the main business, continuous increase in RESEARCH and development investment, so that the semiconductor design business sustained and stable growth.At the same time, with the increasing market demand for image sensors in automotive, security and other fields and the improvement of the company’s market share in related fields, the company’s image sensor solutions have achieved continuous growth.In addition, the company’s touch and display solutions, with the introduction of TDDI new products and further expansion of customers, have also brought new profit growth for the company.On the whole, the company continuously integrates various business systems and product lines, gives full play to the synergistic effect of various business systems, and steadily improves the company’s continuous profitability.CIS, the world’s third, auto CIS global second, industry leading established company is a global leader in CIS, share the third leading enterprises, products widely used in consumer electronics, security, automotive, medical, AR/VR, and other fields, including smart phones, tablet PC, laptop computers, network cameras, security equipment, automobile and medical imaging.In the mobile CIS application field, although the mobile phone market has gradually entered the stock era, the mobile CIS product shipments continue to grow due to the development trend of multi-camera and high-order camera. ICInsights estimates that the mobile CIS sales will grow at a compound annual growth rate of 6.3% in the next five years, reaching 15.7 billion US dollars by 2025.In January 2022, the company released CIS products with a pixel size of 0.61um and a resolution of 200 million pixels. Thus far, the company has achieved the full coverage of low-end 8 million pixels to high-end 64 million and 200 million pixels. It is expected that in 2022, the company will provide more than 40 million image sensor products with a resolution of more than 100 million pixels to smart phone suppliers.In the application field of automobile CIS, with the upgrade of intelligent driving from L1 to L2/L3, the number of cameras increases from about 5 to 8-13. Meanwhile, the pixel of on-board CIS is gradually upgraded from VGA-1M-2M-8m. The value of single camera is gradually increasing, and the increase of volume and price brings the increase of the market scale of on-board CIS.ICInsights expects automotive to be the fastest growing application area for CIS over the next five years, with the in-vehicle CIS market reaching $5.1 billion by 2025.The company is the second largest vehicle CIS supplier in the world, second only to Anson Mei, providing more than 30 types of vehicle CIS products, including front view, loop view, rear view, compartment, ADAS and other fields, which are widely used in Europe, America, Asia Pacific and other automotive brands.Since 2022, the company has released 3 million, 5 million and 8 million pixel on-board CIS new products.In other CIS application fields, the company has a complete CIS product line in medical treatment, UAV, security monitoring, AR/VR and other fields, with a high market share.According to ICInsights, CIS is expected to grow by segment over the next five years: Medical and scientific systems (26.4% CAGR, $1.8 billion by 2025);Security (23.2% CAGR, $3.2 billion by 2025);Industrial robotics and the Internet of Things (21.8% CAGR, $3.5 billion in 2025).TDDI has a complete product line, realizing full coverage from HD720P to FHD1080P, display frame rate from 60Hz, 90Hz, 120Hz to 144Hz, and touch detection point rate from 120Hz to 240Hz.With rich mass production experience in leading mobile phone customers around the world, the company achieved rapid mass production, with the revenue of 613 million yuan in the first half of 2021, and the business proportion increased to 5.81%.At the same time, in 2021, the company will acquire Shenzhen Jidisi layout of the rear decoration market TDDI and DDIC R & D and manufacturing.In addition, the company’s business also includes discrete devices (TVS, MOSFET, Schottky diode, etc.), power management IC (Charger, LDO, Switch, DC-DC, LED backlight driver, etc.) and RF chip product lines.We believe that the company has a stable leading position in the CIS field and is expected to benefit from the rapid expansion of the on-board CIS market to further enhance its market position.At the same time, the company in TDDI, analog, rf and other directions of the layout gradually realized, the future is expected to become the company’s long-term development of the second growth curve.Earnings forecast the company’s 2021-2023 annual revenue is 266.29, 350.48, 43283 billion yuan, EPS is 5.32, 6.96, 8.93 yuan, the current stock price corresponding to PE is 48, 37, 29 times, give “recommended” investment rating.The risk indicates that the industry prosperity is under the downward risk, the progress of new product research and development is not as expected risk, the industry competition is intensified risk, the risk of overseas policy changes, etc.The unit in the recent 90 days a total of 23 institutions to give ratings, buy rating 19, overweight rating 4;The average institutional price target over the past 90 days is 359.47.According to the Securities Star valuation analysis tool, Weil Shares (603501) has a good company rating of 4 stars, a good price rating of 2 stars, and a comprehensive valuation rating of 3 stars.(Rating range: 1 ~ 5 stars, maximum 5 stars) The above content is collated by Securities Star according to public information, if you have any questions, please contact us.

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