Allwinner Technology (SZ:300458) Huafu Securities·2024-08-07 11:00Investment Rating - The report assigns a "Hold" rating for the company [1] Core Views - The company is a leading domestic chip design manufacturer, focusing on smart application processors SoC and various other chip products, with a diversified product line that showcases advantages across multiple sectors [2][3] - The AIoT market is expected to grow significantly, with projections indicating an increase from $82.01 billion in 2023 to $495.09 billion by 2031, providing new growth opportunities for the company's smart SoC chips [2] - The company is expanding into the smart automotive sector, particularly in smart cockpit SoC, and has achieved mass production of several key products [2][3] Company Overview - The company, Allwinner Technology, was established in 2007 and has undergone three main development phases: resource accumulation, market expansion, and accelerated growth [3][4] - The company has a stable shareholding structure, with the founder holding 8.72% of shares and the core team holding a combined 27.61% [4][5] - The core team has extensive experience in the industry, with many members previously part of a successful team at a NASDAQ-listed company [4][6] Financial Data and Valuation - The company’s revenue is projected to grow from 1.51 billion yuan in 2022 to 3.35 billion yuan by 2026, with a compound annual growth rate (CAGR) of approximately 20.62% [2] - The net profit is expected to increase from 211 million yuan in 2022 to 419 million yuan by 2026, reflecting a significant recovery from previous downturns [2] - The company is currently valued at a PE ratio of 59 for 2024, which is expected to decrease to 36 by 2026 [2] Revenue and Profit Trends - The company’s revenue grew from 1.20 billion yuan in 2017 to 2.06 billion yuan in 2021, with a slight decline in 2022 due to market conditions, but a strong recovery is anticipated in 2023 [12][15] - The gross margin and net margin peaked in 2021 at 40.51% and 23.94%, respectively, but have since declined due to various market pressures [13] - The company’s R&D expenses have been consistently high, accounting for 29.14% of revenue in 2023, indicating a strong commitment to innovation [24] Customer and Market Position - The company has established strategic partnerships with major clients, with the top five customers accounting for 45.65% of total sales in 2023 [15] - The domestic sales ratio has increased significantly from 33.54% in 2017 to 68.98% in 2023, reflecting a shift in focus towards the growing domestic market [15] - The company’s products are widely used in various applications, including smart home devices, automotive electronics, and industrial automation [10][19]