Caijing.com Capital Market News On August 12, the domestic CPU leader Haiguang Information officially landed on the Science and Technology Innovation Board, with an opening price of 70 yuan per share, up 94.44% from the issue price (36 yuan). In the end, the closing price of the company on the day was 60.10 yuan per share, the stock price rose 66.94%, and the total market value was 139.7 billion, ranking third in the semiconductor sector after SMIC and North Huachuang.
Haiguang Information was established in 2014, and its main products include Haiguang Universal Processor (CPU) and Haiguang Co-processor (DCU). According to IDC data, in 2020, Haiguang Information’s CPU sales market share will be about 3.75%, accounting for the vast majority of the domestic x86 server processor market share.
Although the issue price-earnings ratio is as high as 315 times, Haiguang Information is still sought after by investors. In this IPO, Haiguang Information raised a total of 10.8 billion yuan and over-raised funds of 1.64 billion yuan. It will invest in the research and development of a new generation of Haiguang general-purpose processors, a new generation of Haiguang co-processing, the construction of an advanced processor technology research and development center, and technology and development reserves. funds.
East Asia Qianhai Securities believes that Haiguang Information relies on AMD’s authorized core technology and its own large R&D investment to achieve product performance superiority, and has a greater competitive advantage in domestic substitution in the main business field. From the downstream point of view, the company’s products are the only two processors based on the X86 architecture in China, mainly focusing on servers, workstations, data centers and other fields, and will continue to improve in the future with the opening of Xinchuang industry space.
Profitable last year
In 2014, in order to promote the leap-forward development of our integrated circuit industry, the “National Integrated Circuit Industry Development Promotion Outline” was officially released, and a national integrated circuit industry investment fund of 100 billion yuan was established at the same time. In this context, Haiguang Information came into being.
According to the data, Haiguang Information was born out of the Chinese Academy of Sciences, and its largest shareholder is Suguang. In 2016, Haiguang Information introduced x86 architecture authorization and established two joint ventures with AMD. Among them, Chengdu Haiguang Microelectronics Technology Co., Ltd. owns the authorized IP and is responsible for chip production, and Chengdu Haiguang Integrated Circuit Design Co., Ltd. is responsible for chip design and sales.
Haiguang was established in 2014, and reached a cooperation with AMD in 2016 to jointly establish two subsidiaries and introduce x86 architecture authorization. Among them, Chengdu Haiguang Microelectronics Technology Co., Ltd. owns the authorized IP and is responsible for chip production. AMD holds 51% and Haiguang Information holds 49%; Chengdu Haiguang Integrated Circuit Design Co., Ltd. is responsible for chip design and sales. Haiguang Information holds 70% of the shares.
Since 2018, Haiguang CPU has been mass-produced and put into commercial use one after another, and the company’s revenue has achieved rapid growth. The prospectus shows that from 2019 to 2021, Haiguang Information achieved operating income of 379 million yuan, 1.022 billion yuan, and 2.310 billion yuan, respectively, and realized net profits of -0.83 billion yuan, -0.39 billion yuan, and 327 million yuan.
It is not difficult to see that Haiguang Information did not achieve profitability until last year. In this regard, the company stated in the prospectus that the operating income of the company’s products in the initial stage of listing was relatively small, while the investment in research and development funds was relatively large, and it implemented multiple equity incentives for key employees and confirmed a large amount of share-based payment accordingly.
According to the prospectus, due to factors such as the characteristics of the integrated circuit industry and the special product cost structure of high-end processors, Haiguang Information has always maintained a high-intensity investment in research and development. From 2019 to 2021, R&D investment was 175 million yuan, 546 million yuan, and 745 million yuan respectively, accounting for 228.04%, 106.60%, and 68.60% of each year’s revenue, respectively. R&D expenses have a certain impact on the company’s net profit.
However, because the company’s main products are compatible with the international mainstream x86 processor architecture and technical route, Haiguang CPU has benefited greatly from this round of ICT localization, and its revenue has achieved rapid growth. Up to now, the products of many domestic server manufacturers such as Inspur, Lenovo, H3C, and Tongfang have been equipped with Haiguang CPU chips. As of the end of 2021, Haiguang CPU series products Haiguang No. 1 and Haiguang No. 2 have been commercialized, and the main customers include ICBC, Bank of China, PetroChina, Sinopec and other major central enterprises.
Responsible for domestic CPU
The CPU (central processing unit) becomes the central processing unit, the computing and control core of the computer system, the final execution unit for information processing and program operation, and can be applied to servers, workstations, personal computers (desktops, laptops), mobile terminals It is closely related to people’s work and life on different devices such as embedded devices.
For a long time, the CPU market has been firmly controlled by European and American giants. Taking the mainstream architecture x86 architecture server CPU as an example, in 2020, the combined market share of Intel and AMD will exceed 95.00%, and the market share of Intel products in particular is far ahead.
Up to now, most of the international mainstream integrated circuit design companies have experienced more than ten years of development, accumulated a large number of technology, market and human resources, and their technology and market share are in a substantial leading edge. In addition, my country adhered to the development model of “making is worse than buying” in the field of integrated circuits in the early days, which to a certain extent caused a passive situation such as a weak industrial foundation and a lack of high-end talents.
As the leading industry of the national economy, the development of the information industry supports the transformation and upgrading of traditional industries. According to customs statistics, integrated circuits have surpassed crude oil and become my country’s largest imported commodity. The import quota in 2020 has reached 2,420.7 billion yuan. Therefore, the development and promotion of safe and controllable high-end processors is crucial to our country.
On the other hand, due to the influence of trade protectionism, anti-globalization and other factors, my country’s need to achieve independent control in the field of core chips is urgent. Therefore, Chinese chip companies such as Haiguang Information, Loongson Zhongke, and HiSilicon are valued by capital. Before Haiguang Information, Loongson Zhongke was the first to be listed on the Science and Technology Innovation Board.
As one of the few integrated circuit design companies with high-end general-purpose processor and coprocessor research and development capabilities, the performance of the first- and second-generation CPU and first-generation DCU products developed by Haiguang Information has reached the same international level. The level of mainstream high-end processors is in a leading position in China.
Different from most domestic CPU manufacturers, Haiguang Information is one of the few CPU suppliers in China that adopts the mainstream x86 architecture, and has great advantages in compatibility, software and hardware development. At the same time, the company takes advantage of the unique advantages of its high-end processors in terms of function, performance, ecology and security, and cooperates with complete machine manufacturers, basic software, application software, system integrators and industry users to establish an industry based on Haiguang’s high-end processors. chain.
However, due to the reliance on the AMD architecture on the instruction set, Haiguang Information’s CPU R&D and production have not been truly autonomous and controllable. In this regard, Haiguang Information stated in the prospectus that the company faces the risk of not being able to continue to use authorized technologies or insufficient accumulation of core technologies in the future.
Northeast Securities believes that under the background of intensified competition in the technology field, the Chinese government’s support for domestic CPUs has gradually increased. With the continuous improvement of the performance of domestic CPUs, the continuous improvement of the software ecosystem and the acceleration of informatization in the future, the demand for domestic CPUs will continue to increase, and domestic CPU manufacturers are expected to benefit in the long run.