On January 27, BYD Semiconductor, a domestic wafer manufacturing company, finally ushered in the first meeting of the ChiNext board.
As an enterprise that has received investment from many platforms such as Xiaomi Group, Sequoia Capital, and SAIC Investment, BYD Semiconductor is on the right track after experiencing a series of events such as preparation for split listing, rapid financing, and termination of listing.
As the first stock of automotive chips, what are bydy-based businesses of BYD Semiconductor? What opportunities and challenges are shown in the company's financial report? Under the continuous lack of cores in the automotive industry, can BYD Semiconductor seize the opportunity to become the first stock of automotive chip localization?
The hot sales and lack of cores of new energy vehicles have led to a significant increase in revenue, and the proportion of R&D investment has decreased slightly
According to the prospectus, BYD Semiconductor was established in 2004, and its main business is divided into five major sectors: power semiconductors, intelligent control ICs, intelligent sensors, optoelectronic semiconductors, and manufacturing and services. The company plans to issue less than 50 million shares, accounting for more than 10% of the total share capital after the issuance, and the use of the raised funds will focus on the investment and construction of key technology research and development projects for power semiconductor chips, high-performance MCU chip design and test technology research and development projects, high-precision BMS chip design and test technology research and development projects, and supplementary working capital.
According to BYD Semiconductor's latest financial report data, the company's operating income from 2018 to 2020 and from January to June 2021 reached 1.34 billion yuan, 1.096 billion yuan, 1.441 billion yuan and 1.235 billion yuan, and the net profit reached 103 million yuan, 0.85 billion yuan, 0.58 billion yuan and 184 million yuan, respectively. 2018-2020 is more volatile, and the momentum in the first half of 2021 is better.
BYD Semiconductor officially said that the main business income of the latest reporting period has increased significantly, mainly due to the increase in sales of downstream new energy vehicles, which has led to a significant increase in the company's sales of vehicle-grade products. Businesses such as automotive-grade power semiconductors, automotive-grade MCUs in the intelligent control IC segment, and on-board image sensing modules and electromagnetic sensors in the smart sensor segment have increased with the growth of demand for new energy vehicles.
In addition, due to the tight global chip supply, downstream home appliances, industrial control and other customers in order to ensure the security of the supply chain, increased the procurement of domestic chip manufacturers, the company's industrial-grade power semiconductor products, industrial-grade MCU chips and other revenues increased significantly. Earlier, Chen Gang, general manager of BYD Semiconductor, also told Shell Financial Reporter that the company is currently supplying semiconductors for home appliances and other industries.
The total assets of the enterprise also increased from 1.308 billion yuan in 2018 to 4.525 billion yuan in January-June 2021, reflecting BYD's support for the expansion of semiconductor business; the proportion of R&D investment in operating income fluctuated relatively smallly in the company's four reporting periods, respectively, 8.2%, 8.87%, 9.42% and 7.86%.
The five main businesses have both good and bad, and the wafer manufacturing capacity utilization rate is low
At present, power semiconductors are an important part of BYD's semiconductor business, and its revenue has accounted for 38.07%, higher than the other four. In 2018, 2019, 2020 and January-June 2021, the revenue of BYD Semiconductor's power semiconductor business was 438 million yuan, 297 million yuan, 461 million yuan and 465 million yuan, accounting for 33.04%, 27.7%, 32.41% and 38.07% of the total revenue, respectively.
Institutional data show that in the field of IGBT, BYD Semiconductor ranked second in the world among new energy passenger car motor driver manufacturers in 2019 and 2020 for two consecutive years, and ranked first among domestic manufacturers, with a market share of 19%, second only to Infineon.
According to the company, power semiconductor products mainly include SiC modules, IGBT modules, IPM, single tubes, etc., and their direct and indirect purchasers include BYD Automobile, Xiaokang Automobile, Yutong Automobile, Foton Automobile, Ruiling Shares, Beijing Times, INVT, Blue Ocean Huateng, Huichuan Technology and other companies.
Auto analyst Zhang Xiang told Shell Financial Reporter that BYD Semiconductor has a deep accumulation in the automotive high-power components IGBT, while the rapid development of new energy vehicles, sales in 2022 or will increase by 79% year-on-year, the market prospect is broad, the semiconductor market size will be further expanded. At the same time, as an important part of the chip as a national development strategy, it has also received attention and support from many parties.
The fluctuation of intelligent control ICs is relatively large, and their gross profit margins since 2018 have been 23.28%, 29.19%, 26.32% and 38.97% respectively. Officials said that the main products of the business are MCU chips and power ICs, of which the revenue proportion of MCU chips has increased year by year. The decline in 2020 is mainly affected by the lack of upstream raw material supply; from January to June 2021, due to the increase in market demand, the unit price of MCU chips and power IC rose, while the proportion of sales revenue of MCU chips, a high-gross margin product, increased, which led to an increase in gross profit margin.
In terms of intelligent sensors, the company's products mainly include CMOS image sensors, in-vehicle image sensing modules, electromagnetic sensors and embedded fingerprint sensors. The overall gross margin change is limited, a large fluctuation point between 2019 and 2020, the company explained, the main reason is the increase in the proportion of low gross profit industrial product sales.
Optoelectronic semiconductor business mainly includes LED light sources, LED applications and intelligent optoelectronics. During the reporting period, optoelectronic semiconductor hair
Interest rates were 22.08%, 26.61%, 29.39% and 23.66%, respectively, and the slight decline in gross profit margin in January-June 2021 was mainly due to the intensification of LED light source part of the product according to the market competition, while the proportion of revenue of the intelligent optoelectronic business with fierce market competition increased.
At the 2022 (7th) China New Energy and Intelligent Connected Vehicle Innovation Conference held in Haikou on January 6, 2022, Huang Yonghe, senior chief expert of China Automotive Technology and Research Center, mentioned that most of the production of wafers in the chip industry is abroad, and in order to promote the independent and controllable chip industry, it is recommended that the industry promote the localization of wafers.
As one of the few companies in China with wafer manufacturing business, BYD Semiconductor's performance in the financial report is not good. The company mentioned that due to the poor performance of the wafer manufacturing business, the gross profit margin of manufacturing and services gradually declined, from 37.05% in 2018 to 27.91% in 2020, and rebounded slightly in the first half of 2021 to reach 29.98%. From 2018 to 2020, BYD Semiconductor's wafer manufacturing supply capacity utilization rate is low, especially in the first half of 2020, due to the impact of the new crown epidemic, orders have decreased, and fixed expenses such as manufacturing expenses have increased.
There are risks such as an excessive proportion of related party transactions and an increase in uncertainty in the international trade environment
It is worth mentioning that at present, the main sales objects of BYD Semiconductor's products are BYD Group, which has accounted for more than 50% since 2018. The risk warning section of the prospectus also mentions that at present, the proportion of related party transactions of enterprises is relatively high, and there is a risk that the expansion of third-party customers will not meet expectations.
In this regard, BYD founder Wang Chuanfu once said in an interview, "Subsidiaries only earn BYD's money, that is not called the skill, dismantling out to earn the market money is called the skill, which means that the product is competitive." So we have a market-oriented 1.0 strategy, that is, the separation of the parts business. Motors, batteries, powertrains and other businesses are killed in the form of business units to compete with their peers. ”
In addition, although the company's export expansion shows an upward trend, due to the long customer certification cycle, the overall scale of export sales in the short term is still difficult; on the other hand, with the gradual improvement of new energy vehicle sales and market share of major customers (such as BYD Automobile), the company's sales concentration may even be further improved, once the main customer operation due to macroeconomic or market competition changes significant adversely, sales decline or change suppliers, will also adversely affect the company's operation and performance.
Procurement of major raw materials for BYD Semiconductor
The risk of international trade disputes also creates uncertainty about business expectations. Since the semiconductor industry is the foundation of the electronics industry, it is a strategic industry that countries attach great importance to. In recent years, international trade disputes have escalated, the uncertainty of the international trade environment has increased, and the development of the mainland semiconductor industry has been affected to a certain extent. According to official data from BYD Semiconductor, in 2018, 2019, 2020 and January to June 2021, the proportion of the company's overseas procurement to the total procurement in each period was 31.12%, 30.84%, 27.25% and 21.43%, respectively. Although the import share is decreasing, if there are major adverse changes in the international trade environment in the future, wafer foundry, high-end equipment, etc. may appear to be supply shortages, price increases, import restrictions and other situations.
Beijing News shell financial reporter Bai Haotian Editor Xu Chao Proofreader Yang Xuli