Yangjie Technology(300373) 申万宏源·2024-03-04 16:00Investment Rating - Buy rating (first coverage) with a 24% upside potential based on 25X PE valuation for 2024 [2][8] Core Views - Yangjie Technology is a leading IDM (Integrated Device Manufacturer) in the domestic discrete device market, with a CAGR of over 30% in revenue and net profit from 2018 to 2022 [2] - The company has a diversified product portfolio, including traditional diodes (H1), small-signal and MOSFET products (H2), and IGBT/SiC products (H3), with a vertically integrated supply chain covering 4-inch, 5-inch, 6-inch, and 8-inch wafer production lines [2] - Yangjie holds the second-largest global market share in power diodes and is the global leader in rectifier bridges and photovoltaic bypass diodes [2] - Short-term recovery is expected as overseas inventory depletion nears its end, with growth resuming in 2024, particularly in small-signal and MOSFET products [2] - Long-term strategy focuses on global expansion, aiming for a 50-50 revenue split between domestic and international markets by implementing a dual-brand strategy ("YJ" for domestic and Asia-Pacific markets, "MCC" for Europe and the US) [2][10] Financial Projections - Revenue is projected to grow from 5.6 billion CNY in 2023 to 7.8 billion CNY in 2025, with net profit increasing from 917 million CNY to 1.28 billion CNY over the same period [3][8] - Semiconductor device revenue is expected to grow at a CAGR of 18.4% from 2023 to 2025, driven by traditional diodes, small-signal/MOSFET products, and IGBT/SiC advancements [9] - ROE is forecasted to improve from 10.7% in 2023 to 11.8% in 2025, reflecting operational efficiency and prudent capacity expansion [3][33] Market Position and Product Strategy - Yangjie ranks second in China's power discrete device market and 12th globally, with a goal to enter the global top 10 [21][36] - The company has a strong foothold in the diode market, with a leading position in power diodes, rectifier bridges, and photovoltaic diodes, and is expanding into high-end applications such as automotive electronics [2][41][43] - In the MOSFET and IGBT segments, Yangjie is accelerating R&D for automotive-grade products, with IGBT revenue growing over 50% YoY in 1H23 [46][52] - The company is strategically investing in SiC (silicon carbide) production, with plans to establish a 6-inch SiC wafer production line, targeting the growing demand in electric vehicles and renewable energy [54][56] Global Expansion and Operational Efficiency - Yangjie's overseas revenue accounted for 30.9% of total revenue in 2022, with a target to achieve a 50-50 domestic-international revenue split [2][58] - The company has established 12 international sales and technical service centers and is building a packaging and testing production line in Vietnam to support its global expansion [2][58] - Operational efficiency is highlighted by high utilization rates across its production lines, with 6-inch lines operating at over 90% capacity and 8-inch lines running at full capacity [33]