100 billion integrated circuits ** brewing

Recently, it was learned from several IC companies in China that government departments are planning to set up a fund with a scale of 100 billion yuan, focusing on supporting domestic IC companies. If the fund is successfully implemented, the total size of the fund will exceed the input of the entire domestic IC industry in the past 10 years.

A number of people familiar with the project revealed that the newly established fund will be market-based and will be composed of government departments and social funds. It will invest in domestic IC companies in the form of equity investment to support local companies to become bigger and stronger.

Industry experts believe that the establishment of this fund is undoubtedly a strong incentive for domestic ICs that have always lacked funds. However, in order to promote the rapid development of the entire industry, talents, management, intellectual property and other aspects need to be strengthened in addition to funds.

Recently, Orient Securities released a research report saying that it is recommended to pay attention to leading companies such as Datang Telecom and Changjiang Electronics. At the same time, Taiji Industry, which is expected to fill the gap in the mainland's memory chips, and Qixing Electronics, a national company with abundant cash, also deserves attention.

Institutional key stocks Comments:

Guosen Securities Beijing Jun Zheng: to enter the wearable area to open up new growth space in the past two years, because software ecology problems led to the company's achievements in the field of mobile Internet terminal development is minimal; but in 2013 with the rise of wearable devices, the company quickly The smart phone solution was launched to avoid the software ecology problem and find new development opportunities.

Wearables will face explosive growth opportunities in the coming years. According to BI's forecast, global shipments of wearable devices will reach 260 million units by 2017; the global market for wearable devices is expected to reach US$12 billion by 2018. According to the data of iResearch, it is estimated that in 2015 China's wearable device market will reach 40 million units; in 2012 China's wearable device market will be 610 million yuan. It is estimated that in 2015 China's wearable device market will reach 11.49 billion yuan. .

The company has the design capabilities of the CPUIP core, and its XBurstCPU core is one of the few CPU cores in the world that has been successfully mass-produced. The power consumption of its products is much lower than similar products. Current battery technology makes wearable devices generally short standby time, and the ultra-low power consumption characteristics of the company's products make it a very big advantage in the wearable field and can help customers improve their standby time as much as possible.

As an embedded CPU design company leader, or will benefit from the semiconductor New Deal to strongly support industry estimates, the country may have more strength in the support of the development of integrated circuit industry policies introduced. As the leading domestic embedded CPU chip manufacturer with independent intellectual property rights, it is expected that it will become the key supporting target of the New Deal.

Risk Warning: Uncertainty in the development of wearable devices; market competition risks.

Give a "recommended" rating. We expect the company's 2013/2014/2015 EPS to be 0.32/0.57/0.95 yuan respectively, and the December 12 2013 closing price of 32.55 yuan, corresponding to the PE of 110.5/62.3/37.6 times. From the perspective of PE, the company's valuation is not low, but we believe that: First, the company is currently facing a large opportunity for wearable development; Second, the company's performance is at an inflection point, the future trend is better; Third, the company's current cash reserves, There are merger and acquisition integration opportunities in the future. Therefore, we gave the company a "recommended" rating for the first time.