Recently, two memory chip companies announced their first-quarter results, with a significant increase in performance, and both companies set the best results in the history of single-quarter net profit. On the evening of April 16, BIWIN Storage (688525) released a performance forecast, profit: 1.5-180 million yuan, a year-on-year increase of 2.19-2.42 times, and before that, Demingli (001309) also announced a performance forecast, with a profit of 186 million yuan-226 million yuan, a year-on-year increase of 1.64-1.81 times. You can't look at a company's performance in isolation, what does it mean for BIWIN Storage and Demingli to achieve a record high performance?
The performance of these two companies in the first quarter increased sharply, or it indicates that memory chips began to recover in the first quarter, and the volume and price rose together, only in this way can they create the best performance in history. Looking back at BIWIN's past performance, in the case of a general shortage of chips in 2021, the company's best single-quarter net profit is only 87.62 million yuan, and in the first quarter of 2024, if the 85 million pipe fees generated by the fierce equity are excluded, the net profit can reach 235-265 million yuan. It has achieved a leap of 200 million.
If combined with the semiconductor equipment leader NAURA that previously predicted a significant increase in performance in the first quarter, AI chip Rockchip Micro and Jingchen Co., Ltd., and power semiconductor business Jiejie Microelectronics, the entire semiconductor industry chain is showing a recovery trend, but the certainty of memory chips is the strongest for two reasons:
1. The global memory chips mainly include Samsung and Hynix in South Korea, Micron and Western Digital in the United States, and Kioxia in Japan
In 2023, the capital expenditure of Micron and Hynix will be reduced by 40% and 50%, and the giants have a strong ability to control the price of memory chips.
2. In the chip industry chain, the cycle volatility of memory chips is the most obvious, and it is currently at the starting point of the fifth cycle since 2000. The current time node is the rapid development of AI, driving the rapid growth of server demand, while AI mobile phones and AI PCs are accelerating the update cycle of consumer electronics, in addition, the penetration rate of smart cars is also increasing rapidly, and the demand in 2024 is obviously better than the consumption wave brought by working from home in 2020.
In addition to BIWIN Storage and Demingli, there are two companies with outstanding advantages in memory chips, they are GigaDevice and Beijing Junzheng.
GigaDevice (603986) has strong overall R&D and innovation capabilities, and is the most technologically advanced storage manufacturer in the A-share market, and has become a platform enterprise with storage + MCU + sensor.
Beijing Junzheng (300223) is a company with a complete industrial chain in memory chip companies, and the company's main business is not only memory chips, but also computing chips, analog chips and interconnection chips. According to the company's annual report, the company deducted non-net profit of 150 million yuan in the fourth quarter of last year, +377.5% year-on-year and +3.1% month-on-month, and its performance is improving.
At present, memory chips benefit from three major benefits, one is the cyclical recovery of the industry, the second is the increase in the proportion of domestic substitution, and the third is the dividend brought by technological innovation. BIWIN's R&D expenses in the first quarter increased by 2 times, reaching 100 million yuan in a single quarter, indicating that the company has sufficient confidence in the industry. On the whole, at a low level, related stocks that have not been significantly hyped are worth paying attention to.