1.Chengdu Huawei (Science and Technology Innovation Board).
Issue **: 1569
Issue P/E ratio: 3704
Industry P/E Ratio: 3014
Issue size: 150 billion yuan
Main business: R&D, design, testing and sales of special integrated circuits to provide overall solutions for signal processing and control systems.
Other important information of the company is shown in the following figure:
Comments: In terms of market prospects, CIC Industry Research Institute predicts that the sales of China's integrated circuit industry will reach 137 trillion yuan, with an average annual compound growth rate of about 11 in the next five years80%, which will reach 2 in 202714 trillion yuan. Among them, as of 2023, the domestic analog integrated circuit market size will exceed 300 billion yuan, and the market growth rate will rise steadily, and the joint research network predicts that by 2025, the scale of China's analog integrated circuit market will grow to 334 billion yuan. In addition, according to the calculation of the Prospective Industry Research Institute, China's special electronics industry is expected to continue to show a growth trend in the future, and the market size is expected to exceed 500 billion yuan by 2025.
In terms of the company's performance, from 2020 to 2022, driven by the localization of chips in special fields, Chengdu Huawei's operating income has grown rapidly, with annual revenue growth of more than 50%. Since 2023, the overall performance growth of the semiconductor industry has slowed down due to the increase in the localization rate of chips and the slowdown in the growth rate of downstream customer demand. In the first three quarters of 2023, Chengdu Huawei achieved an operating income of 62.9 billion yuan, an increase of 14 over the same period last year35%；Achieved net profit attributable to the parent company of 195.4 billion yuan, an increase of 7 percent year-on-year61%。
Looking back at the new listings in 2023, there were 313 new listings throughout the year, and 52 were broken on the first day, with a first-day breakage rate of about 17%. Among them, there were 67 new stocks listed on the Science and Technology Innovation Board throughout the year, and 13 of them broke on the first day, with a first-day breakage rate of about 19%. Since October 23, none of the 59 new shares listed on the A-share market has been broken on the first day (Haisheng Pharmaceutical broke intraday on the first day and finally closed flat).
From the perspective of valuation, the company's issuance price-earnings ratio is higher than the industry average, and there is a certain risk of breakage. However, considering that the company's performance has been improving as a whole in recent years, and the recent hype of the new market still exists, it is comprehensively judged that the probability of Chengdu Huawei breaking on the first day is about 10%.