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"Investor Network" Wu Wei
Recently, Silan Micro (600460. SH) has encountered market doubts due to investment losses. The 2023 annual report disclosed that the company's investment in Yuneng Technology (688348. SH), Anlu Technology (688107. SH) due to stock price changes, resulting in a loss of 35.79 million yuan in net profit attributable to the parent company of Silan Micro that year. In the past 20 years, the first loss of Silan Micro has also caused widespread discussion in the market, and some media have reported on the investment loss of Silan Micro with the title of Silan Micro's "stock speculation" loss.
However, according to the company's disclosure, the company's investment in Yuneng Technology and Anlu Technology was not high, and after the successful listing of these investment targets, a total of nearly one billion yuan of fair value change income was provided for Silanwei in 2021 and 2022. At present, the stock price changes of Yuneng Technology and Anlu Technology have caused Silan Micro to have a fair value change profit of 452 million yuan, which is only the normal performance of the market.
However, for a long time, although Silanwei's revenue has been growing steadily, the company's overall profitability is not strong, and non-recurring gains and losses such as investment income and government subsidies have a greater impact on the company's net profit. In 2018, 2021 and 2023, the company issued shares to raise a total of more than 6.7 billion yuan, and since 2018, Silan Micro has only distributed a total of 363 million yuan in cash dividends. Since the company's stock price peaked in July 2021, Silanwei's share price has also fallen by about 70%.
Silan Micro, which has high financing and low dividends, and its stock price continues to fall, has been "accused" by investors, is it wronged?
Profitability is not strong
As a semiconductor company, Silanwei's operating model is the IDM model (integrated equipment manufacturer model), that is, the enterprise involves the production of multiple semiconductor components such as chip design, manufacturing, packaging and testing. At present, Silan Micro's products include integrated circuits, discrete device products and light-emitting diode products.
In the semiconductor industry, the division of labor is becoming more and more subdivided, and the shortcomings of the IDM model are becoming more and more obvious compared with the Fabless model (fabless model). On the one hand, the IDM model requires a large amount of capital investment, resulting in heavy assets for enterprises, and on the other hand, it is difficult to achieve some more advanced designs under the IDM mode due to the limitations of the company's own production capacity and manufacturing process. In 2023, Intel, which has always adopted the IDM model, has also let TSMC OEM OEM with its latest chips.
Silan Micro, which adopts the IDM model, the company's assets are getting heavier and heavier. In 2019, the book balance of Silan Micro's fixed assets was only 2.869 billion yuan, and by the end of 2023, the company's book balance of fixed assets has reached 6.431 billion yuan. It should be pointed out that while the book balance of Silan Micro's fixed assets has increased by 1.24 times in four years, the book balance of the company's projects under construction has also increased from 702 million yuan in 2019 to 1.497 billion yuan at the end of 2023.
Under the asset-heavy model, the high cost of equipment depreciation makes the gross profit margin of Silanwei at a low level in the industry. In 2022, the gross profit margin of Silan Micro is 29.45%, ranking 13th among the 19 companies in the three-level classification of Shenwan discrete devices, and the gross profit margin of Silan Micro in 2023 is 22.21%, as of April 21, among the 10 companies that have published annual reports, the gross profit margin of Silan Micro is only higher than that of Suzhou Good-Technetium (002079. SZ）。
Under the low gross profit margin, superimposed on R&D and management costs, the profitability of Silan Micro has not been strong for a long time.
Since 2019, affected by the epidemic, there has been a shortage of cores and screens in China in 2021 and 2022, and due to this, the gross profit margin of Silanwei has increased from 22.19% in 2020 to 33.19% in 2021 and 29.45% in 2022. Under the influence of strong downstream demand, in 2021 and 2022, the non-net profit of Silan Micro will be 895 million yuan and 631 million yuan respectively, which is rare to exceed 100 million yuan.
In addition to 2021 and 2022, Silan Micro Deduction non-net profit will be less than 100 million yuan for a long time, such as in 2023, after the company's gross profit margin drops to 22.21%, the company's non-net profit will only be 58.9 million yuan. It should be noted that in 2019 and 2020, affected by the decline in the company's gross profit margin, the non-net profit deducted by Silan Micro showed a loss of 120 million yuan and 23.51 million yuan respectively;
Even in 2021 and 2022, when the company's non-net profit was higher, non-recurring gains and losses such as government subsidies and investment income accounted for a relatively high proportion of Silan's net profit in the current period. In 2021, Silanwei's net profit was 1.518 billion yuan, but 623 million yuan of it was provided by government subsidies and gains generated by the fair value change of the company's investment in Yuneng Technology, Anlu Technology and other companies. In 2022, with the company's net profit of 1.052 billion yuan, the non-recurring profit and loss also provided a profit of 421 million yuan for Silanwei.
The amount of dividends is smaller
Although the company's non-net profit is not high and the company's profit mainly depends on non-recurring profits and losses, although it has paid dividends 5 times from 2018 to 2022, the company's total dividend amount is only 363 million yuan, of which in 2019, Silan Micro only distributed 6.5603 million yuan of profits.
From 2018 to 2022, Wingtech Technology (600745. SH) distributed a net profit of 628 million yuan in three dividends, and the revenue in 2022 is much lower than that of Yangjie Technology (300373. SZ), the company also distributed a net profit of 596 million yuan in 5 dividends, and Star Semiconductors (603290.SH), whose revenue in 2023 is less than half of that of Silan Micro, will distribute a net profit of 365 million yuan in 2021 and 2022.
Although for a long time, the level of non-net profit deduction of Silan Micro is not high, and the company has not distributed much cash dividends, but the executives of Silan Micro generally receive high salaries.
According to the company's disclosure, in 2023, the annual salary of Chen Xiangdong, the company's actual controller and chairman, will be as high as 1.55 million yuan, Chen Yue, the secretary of the board of directors and chief financial officer, will also have an annual salary of 2.866 million yuan, and Wu Jianxing, deputy general manager, will have an annual salary of 5.404 million yuan. According to estimates, the average salary of the 11 non-independent directors who receive remuneration in Silan Micro is as high as 1.912 million yuan. In the current period, the total remuneration of directors, supervisors and senior executives of Silan Micro was 21.3517 million yuan, an increase of 206,800 yuan compared with 21.1449 million yuan in 2022.
Recently, in order to boost the confidence of the capital market, after 10 years, the State Council issued the "Several Opinions of the State Council on Strengthening Supervision and Preventing Risks and Promoting the High-quality Development of the Capital Market".
Executives generally have high salaries and small dividends, can they continue to be an "iron rooster"?
A number of institutions are covered
Although the total dividend of Silanwei is not high, the company has carried out three non-public offerings in January 2018, October 2021 and November 2023. Among them, in 2018, the net fundraising of Silan Micro was 706 million yuan, in 2021 it was 1.09 billion yuan, and in 2023, the net fundraising amount was as high as 4.919 billion yuan, and in three non-public offerings, Silan Micro raised a total of 6.7 billion yuan from the market.
According to the announcement, in November 2023, in the non-public offering of Silan Micro, the issue price will be 20 yuan per share. The issuance was subscribed by 14 institutional investors, including the second phase of the National Fund, Shougang Industrial Transformation Fund, Tianan Life Insurance, Caitong Fund and Nord Fund, of which the second phase of the National Fund subscribed for an additional share of 1.24 billion yuan, and the Nord Fund and Caitong Fund subscribed for an additional share of 651 million yuan and 522 million yuan respectively.
After participating in the financing of Silan Micro, the second phase of the National Fund currently holds 3.72% of the shares of Silan Micro, which is the third largest shareholder of the company, and Chenyi Hengxin and Tianan Life Insurance have also become the top ten shareholders of the company after subscribing to the new shares of Silan Micro, and they currently hold 1.2% and 1.14% of the shares of Silan Micro respectively.
It is worth mentioning that although the additional issuance of Silan Micro in November 2023 has not been lifted so far, due to the impact of the company's performance growth being less than expected, as of mid-April, the share price of Silan Micro has fallen to around 18 yuan / share, which has fallen by about 10% compared with the additional issue price of 20 yuan / share.
In this case, in November 2023, the second phase of the National Fund subscribed for 61.975 million newly issued shares of Silan Micro with 1.24 billion yuan, and the corresponding market value of the shares currently held is around 1.129 billion yuan, Chenyi Hengxi, which subscribed for 20 million newly issued shares with 400 million yuan, currently holds the corresponding market value of the shares around 364 million yuan, and subscribed for 8 million new shares of Tianan Life Insurance with 160 million yuan, and the corresponding market value of the shares currently held is around 146 million yuan.
In fact, since July 2021, Silanwei's share price reached a high value of 74.58 yuan per share, and the company's stock price has shown a significant downward trend. During the period, only in November 2021, March 2022, July 2022 and April 2023, the company's stock price rebounded, but the high value of each rebound is getting lower and lower, as of the previous day, the stock price of Silan Micro has declined by 75.86% compared to the high value.
It is worth mentioning that in the additional issuance in October 2021, the issue price of Silan Micro was as high as 51.8 yuan / share, and the stock price chart shows that after October 2021, the share price of Silan Micro only exceeded 51.8 yuan / share for several trading days in March 2023. At that time, the institutions participating in Silan's micro issuance mainly included China Huarong, Bosera Fund, Nord Fund, etc. (Produced by Thinking Finance)■