Goodix Technology (603160): Optical fingerprint demand explodes, IC design leader reproduces high growth (depth report 2)

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Goodix Technology (603160): Optical fingerprint demand explodes, IC design leader reproduces high growth (depth report 2)

Investment Highlights: Optical fingerprint market demand has exploded since 2018Q4.

Since 2017H2, full-screen mobile phones have become popular. Under-screen fingerprints, 3DSensing face recognition is the best identification trend under the full-screen trend, and the maturity and cost advantages of the optical fingerprint industry chain.

In the fourth quarter of 2018, the penetration rate of under-screen fingerprint mobile phones reached 6%, which doubled from the third quarter of 2018, and the penetration rate of under-screen fingerprints in the Chinese market exceeded 12%.

At the beginning of 2019, Xiaomi 9, iQOO, Huawei P30 and other domestic flagship models are equipped with optical fingerprints as standard. Optical fingerprint technology will enter a comprehensive expansion phase in 2019.

IHS expects the number of screen fingerprint implants to increase to 1 in 2019.

800 million pieces; and Sigmaintell predicts that the displacement of fingerprints under optical screens worldwide will reach 2 in 2019.

800 million.

From 2017 to 2018, Huiding Technology has deeply cultivated the optical fingerprint market and established its first-mover advantage.

Huiding Technology is a leading company in IC design. It is in the top three in the world in the fields of touch chip, capacitive fingerprint and optical fingerprint chip, with 5 replacements in 2018.

900 million.

In 2017, MWC and Genting Technology were one of the first companies to launch optical fingerprint solutions.The under-screen optical fingerprint solution with the highest commercial model and gradually 佛山桑拿网 expanding the largest amount.

In March 2019, Huiding Technology’s in-screen optical fingerprint solutions have been used in a total of 26 mainstream brands such as Huawei, OPPO, vivo, Xiaomi, OnePlus, Honor, Lenovo and so on.

The high resilience results from the asset-light property of the IC design leader.

Goodix Technology highlights its light asset attributes. Its asset structure is dominated by current assets. The turnover rate of fixed assets is 23X, and the asset-liability ratio in 2018 is only 23.

16%, far below the level of the electronics industry.

Goodix has no long-term or short-term borrowings, and the financial expenses in 2017 and 2018 replaced negative figures.

From 2011 to 2018, Huiding Technology’s return on net assets (diluted) is 18% -72%, and the variation range is biased. The net profit variation 杭州桑拿网 range is 20% -45%.

In the first two rounds of touch chip and capacitive fingerprint-driven growth, Genting Technology’s net profit showed high flexibility in 2012/2016; in 2019, driven by optical fingerprint chips, it is expected to show high flexibility in performance again.

Out of the technical comfort circle, from sensor chip to IoT platform.

Genting Technology focuses on the four major areas of physical perception, information processing, wireless transmission, and data security, and is committed to providing a complete software and hardware platform.

In February 2019, Genting Technology officially launched the “Sensor + MCU + Security + Connectivity” integrated platform in the IoT field, which can replace smart home, smart city, smart transportation and other IoT application scenarios.

Maintain profit forecast and maintain BUY rating.

Maintain 2019/2020/2021 Huiding Technology’s operating income forecast of US $ 63/73 / 8.9 billion, and return to its parent net profit forecast of 16.
.

8/18.

6/22.

600 million.

The current market value corresponds to 2019/20 PE 29 / 26X. We are optimistic about the development of Huiding in the optical fingerprint market and 3D face recognition, the layout of the Internet of Things, and maintaining the buying level.

Risk Warning: The price reduction of new products is larger than expected.