Semiconductor Transformation Path Of Sanan Optoelectronics: IC Revenue Increased By 6.8 Times, Is It In The Industrial Takeoff Stage?

Sanan Optoelectronics (600703. SH) integrated circuit has become an important point in the semi annual report.

In the first half of 2020, the net profit of Optoelectronics was RMB 3.568 billion, with a year-on-year increase of RMB 3.568 billion.

Sanan optoelectronics said that the increase in operating revenue was mainly due to the increase in sales volume, the decline in unit price, the increase in IC revenue and the rise in precious metal prices.

According to the semi annual report, Sanan integration, a wholly-owned subsidiary of Sanan optoelectronics, achieved a sales revenue of 375 million yuan in the first half of the year, up 680.48% year-on-year.

"The company is more optimistic about integrated circuits, and may contribute to the main performance in the future." On the afternoon of August 19, Sanan photoelectric related personage told the reporter of the 21st century economic report.

IC may be profitable

Although the performance in the first half of the year dropped to the lowest level since 2014, the research reports of Dongfang securities and Guoxin Securities gave Sanan optoelectronics a buy or increase investment rating on August 19.

"We expect the second half of the year to be better than the first half, but the second quarter is better than the first quarter." Sanan photoelectric related people said to the 21st century economic reporter.

This is true from the perspective of non net profit deduction. In the first quarter, the non net profit deducted by San'an optoelectronics was 121 million yuan, and that in the second quarter was 179 million yuan, up 48% month on month.

In the first half of the year, the non net profit deducted by San'an optoelectronics was 300 million yuan, a year-on-year decrease of 37.5%, while in the first quarter, the deduction of non net profit decreased by 57.35%, showing a narrowing of the decline.

And San'an optoelectronics has high expectations for turning over with integrated circuits.

In the semi annual report, Sanan optoelectronics said that the domestic compound semiconductor integrated circuit has broad market space and great development potential, and is currently in the take-off stage of the industry.

According to the official website of Sanan integration, it is a compound semiconductor manufacturing platform covering microwave and radio frequency, high-power power electronics, optical communication and other fields. It has the industrial integration ability of substrate materials, epitaxial growth and chip manufacturing, and has large-scale and advanced process capability of MOCVD epitaxial growth manufacturing line.

According to the historical announcement, the national integrated circuit industry fund has invested 3 billion yuan into the Sanan photoelectric integrated circuit project with 11.3% equity.

Sanan optoelectronics executives told the 21st century economic report that San'an integrated circuit factory is the first 6-inch production line in China and the only domestic 6-inch integrated circuit manufacturing industry in China.

In fact, Sanan's revenue is climbing at a high speed.

In 2019, the revenue of San'an integration will reach 241 million yuan, with a year-on-year increase of 40.67%; in the first quarter of this year, the actual revenue is 166 million yuan, accounting for 69% of the revenue in 2019; in the second quarter of this year, its revenue is 209 million yuan, with a quarter on month increase of 25.9%, and its revenue in the first half of this year is 1.56 times that of 2019.

According to Founder Securities Research Report, the revenue of San'an integration in 2020 is expected to exceed 1 billion yuan.

"IC is likely to be profitable in the second half of this year." Sanan photoelectric related people disclosed.

According to the statement of the semi annual report, there are nearly 100 RF shipping customers of San'an integrated gallium arsenide, and the production capacity of important customers is gradually climbing; there are more than 60 customers of power electronic products, and 27 products have entered the stage of mass production; the high-end products of optical communication business have been verified by important customers in the industry, and enter the stage of batch trial production.

"The scale of integrated circuits should be very large, and we continue to invest." Sanan photoelectric related people said.

The semi annual report also shows that the R & D cost of Sanan optoelectronics reached 143 million yuan in the first half of the year, up 77.59% year-on-year, mainly due to the increase of R & D investment in integrated circuit projects and the increase of R & D projects with expenses.

Inventory higher than revenue in the same period

Sanan optoelectronics, which has bet on integrated circuits, is also extending the integrated circuit industry chain.

At the same time of disclosing the semi annual report on August 19, Hunan San'an, a wholly-owned subsidiary of Sanan optoelectronics, plans to purchase 100% equity of Nortel new materials with cash of 382 million yuan.

Sanan optoelectronics said that the acquisition of Nortel new materials is mainly to consolidate the layout of the company's integrated circuit raw materials, which will help the company break through the development bottleneck and expand the business scale.

But at the same time, Sanan optoelectronics still has three large projects with investment of 10 billion yuan to be put into production.

Sanan optoelectronics semi annual report said that it set up a wholly-owned subsidiary "Quanzhou San'an Semiconductor Technology Co., Ltd." in Nanan Park, Quanzhou Xingu, Fujian Province, and invested in the construction of seven industrialization projects. The projects were implemented by stages, and all the projects were expected to be put into operation within five years and reach the production capacity within seven years.

According to the official website of Sanan optoelectronics, the total investment of the above projects is 33.3 billion yuan. After the completion of the project in 2022, the layout of the whole industry chain in the high-end field of semiconductor compounds will be realized.

According to the semi annual report of San'an optoelectronics, in the first half of the year, the above-mentioned projects achieved operating revenue of 174 million yuan, net profit of 121 million yuan, and has obtained the property rights of 1.6667 million square meters. Some equipment is releasing capacity, and some equipment is still in the stage of installation and commissioning. After the commissioning is completed, the production capacity will be gradually released.

In April 2019, Sanan optoelectronics decided to establish a wholly-owned subsidiary of Hubei San'an in Gedian Economic and Technological Development Zone, Hubei Province. It is mainly engaged in the R & D, production and sales of mini / micro LED epitaxial and chip products and related applications. The total investment of the project is 12 billion yuan. It is expected to complete the project construction and put into operation within 36 months after the completion of all procedures, and reach the production capacity within 48 months.

According to the semi annual report, about 692 mu of Sanan, Hubei Province, with a total land area of 756 mu, has been delisted and issued with certificates. The remaining 64 Mu has not yet entered the listing process and is in the stage of infrastructure construction.

In addition, Sanan optoelectronics decided in June this year to set up a subsidiary of Hunan San'an in Changsha high tech Industrial Development Zone, Hunan Province, to invest in and construct projects including but not limited to the research and development and industrialization of third-generation semiconductors such as silicon carbide. The first phase of the project will be completed and put into operation within 24 months after all procedures and relevant conditions for land use are ready; the second phase project construction and fixed assets investment will be completed and put into operation within 48 months; and the production capacity will be achieved within 72 months.

According to public information, the total investment of Changsha project in Hunan Province is 16 billion yuan.

The semi annual report shows that at present, Sanan, Hunan Province, has been registered and established. The project covers an area of about 1000 mu, of which 749.83 mu of land has been delisted, and the remaining land will be delisted at the end of September.

"The projects in Hubei, Hunan and Quanzhou are all under construction according to the original schedule." "The projects in Hubei and Hunan are all integrated circuits, while those in Quanzhou have led chips and integrated circuits. Some of them have been put into mass production."

However, the inventory of Sanan optoelectronics Co., Ltd. in the first half of this year increased significantly to 3.949 billion yuan, compared with 3.142 billion yuan at the end of 2019.

According to the calculation, the inventory shown in the semi annual report of San'an optoelectronics is 381 million yuan more than its operating income in the same period.

As for the statement in the market that "due to the restrictions on the export of chips by the United States, Sanan optoelectronics's inventory increase is for standby", the above-mentioned Sanan photoelectric related people frankly said: we did not consider so much.

"The increase in inventory has something to do with our expansion of production. Not only we, but other companies are also expanding production. We are also planning how to sell." "Domestic demand has not increased or decreased at present, so there is more production capacity and more inventory," said Sanan photoelectric related person