Ziguang Guowei (002049): Integrated smart card industry chain cuts into new FPGA track

Ziguang Guowei (002049): Integrated smart card industry chain cuts into new FPGA track
The business covers five major tracks, and revenue 深圳桑拿网 continues to grow at a high speed: Ziguang Guowei is a domestic leader in intelligent security chips, highly stable memory chips, FPGAs, power semiconductor devices, and ultra-stable crystal frequency devices. In the past five years, the company’s average annual compound strength was 22%, and the company’s operating income in 2018 was 24.580,000 yuan, an increase of 34 in ten years.3%, mainly benefiting from the recovery of the smart security chip industry and the rapid growth of the storage business.In the revenue structure of Ziguang Guowei, the proportion of businesses with higher gross profit margins has gradually increased, and the core business has shifted from crystal components to chip design. The business structure continues to be optimized, and profitability is expected to increase: 1. Smart security chips: As a leading company in the field of smart security chips, the company has maintained long-term advantages in SIM cards, eSIM, and financial ICs.With the acceleration of domestic substitution, the company’s future performance is expected to be better.2. Storage chip: Due to the limitation of downstream foundry production capacity, the storage business cannot reach economies of scale in the short term, and the net profit is negative, which has affected the normal continued operation. Therefore, Ziguang Guowei intends to make a 100% stake in its subsidiary Xi’an Ziguang GuoxinThe transfer to Ziguang Storage, a subsidiary of Ziguang Group, will help alleviate the pressure on Ziguang Guowei ‘s micro-capital allocation, improve the current situation of Ziguang Guowei ‘s gross margin decline, and give a large amount of financial support to the storage business.3. Special integrated circuits: Ziguang State Micro’s special integrated circuit business is leading the industry in special integration, special FPGA, and special memory. By steadily increasing military spending, the business has huge growth potential. FPGA research and development is progressing well, and the future has a bright future: the scale expansion of FPGA, short development cycle, and high efficiency of parallel computing, so it has great potential in AI, 5G, automotive electronics, and cloud computing. Ziguang Guowei is a leading FPGA company in China and has received strong support from government subsidies. Its high-performance Titan series FPGAs have been mass-produced, adopting a completely autonomous ownership architecture and mainstream advanced manufacturing processes, with DDR3 and PCIe interfaces.There are millions of gate-level FPGAs. Acquisition of Ziguang Liansheng to achieve upstream and downstream integration of smart security chips: On May 31, 2019, Ziguang Guowei intends to increase its revenue to 35.The shares were issued at a price of 51 yuan to Ziguang Shencai, Zijin Haikuo, Zijin Haiyue, Red Maple Capital and Xinyu Investment to purchase 100% equity of Beijing Ziguang Liansheng Technology held by them, and the initial purchase price was 18 billionYuan, the estimated premium is 5-6%.Through this acquisition, Ziguang Guowei ‘s smart security chip business and smart security chip design have been extended to RFID antennas, completing the key industry multi-dimensional layout of IC card manufacturing of “chip design-micro connector manufacturing-module assembly-RFID inlays and antennas”, To achieve “chip design-micro connector production-module production” Trinity. Earnings forecasts and investment advice.It is expected that EPS for 2019-2021 will be 0.7 yuan, 0.86 yuan, 1.06 yuan.Considering the full acceleration of domestic replacements for smart card chips, civil FPGA began mass production and after the completion of the acquisition of Ziguang Liansheng, the company gave the company 84 times the 2019 estimate, corresponding to a target price of 58.8 yuan, the first coverage given a “buy” rating. Risk reminder: the risk that the short-term internal memory chip gross margin level is too low to be solved; the risk of large-scale production of FPGA and power semiconductor business; the risk of M & A Ziguang Liansheng being less than expected.