Allwinner Technology (300458), as a leading domestic designer of intelligent application processors SoC, high-performance analog devices, and wireless interconnection chips, has recently attracted attention from China Postal Securities, which has given it a “buy” rating. The company demonstrates strong development potential due to the implementation of edge AI applications and the increasing demand for high-performance computing in SoCs, but it also faces various challenges such as intensified market competition.
The Rise of Edge AI and Demand for High-Performance Computing in SoCs
Edge AI is entering a rapid development phase, with advantages such as privacy security, low latency, reliability, and low cost, showcasing enormous market potential in areas like smartphones, PCs, and wearable products. Allwinner Technology closely follows the latest upgrades in the Android ecosystem, launching the A523/A527 series of high-performance octa-core architecture computing platforms, which have achieved stable mass production and gained recognition from numerous domestic and international tablet brands. Additionally, the company has deeply optimized its H713 series smart screen chips based on the characteristics of single-chip LCD optical machines, enhancing the picture quality experience of smart projection products, thus becoming a mainstream supplier of smart projection main control chips.
Market Position in Smart Automotive Vision
As the electronic architecture of automobiles continues to evolve, automotive electronic solutions are developing towards high integration. The V853 processor launched by Allwinner Technology is specifically designed for the smart vision field, equipped with efficient NPU computing power and a rich set of peripheral interfaces, providing stable AI edge computing support. The company also offers clients a complete set of intelligent driving assistance algorithms, including advanced driver assistance, blind spot detection, and driver monitoring functions. This indicates that Allwinner Technology has established a relatively complete solution and market competitiveness in the smart automotive vision field.
Financial and Market Expectations
China Postal Securities expects Allwinner Technology’s net profit attributable to the parent company to be 220 million yuan, 380 million yuan, and 550 million yuan for 2024-2026, respectively. This profit forecast reflects the market’s optimistic expectations for Allwinner Technology’s future development. However, the research team led by analyst Mao Zheng from Huaxin Securities has an average prediction accuracy of 66.19%, forecasting a net profit of 172 million yuan for 2024, corresponding to a predicted price-to-earnings ratio of 135.74. This indicates that although the market holds an optimistic view of its future development, achieving actual performance still faces certain uncertainties.
Technical and Market Advantages
Allwinner Technology has significant advantages in technological research and development, being one of the few domestic chip design companies with IP cores. Its products excel in ultra-high-definition video encoding and decoding, high-performance CPU/GPU/AI multi-core integration, advanced process high integration, and ultra-low power consumption. Furthermore, the company has established deep cooperative relationships with well-known enterprises such as Xiaomi, Tencent, Alibaba, and Haier to jointly develop various intelligent products. In the automotive central control chip market, Allwinner Technology holds a 40% market share, and a 30% share in the 360-degree surround view market.
Potential Risks and Challenges
Despite Allwinner Technology’s numerous advantages in technology and market, it still faces many challenges. Firstly, the risk of technological iteration and R&D investment falling short of expectations may affect the company’s long-term competitiveness. Secondly, rising raw material prices and intensified industry competition will exert pressure on the company’s profitability. Additionally, international trade frictions and production capacity not meeting expectations may also pose threats to the company’s future development.
Conclusion
Allwinner Technology, with its technological advantages and market position in edge AI applications, high-performance computing in SoCs, and smart automotive vision, shows good development prospects. However, the intensifying market competition and uncertainties in technological iteration remain significant challenges the company must face. In the future, Allwinner Technology needs to continue increasing R&D investment, optimizing product structure, and enhancing market share to cope with the increasingly fierce market competition environment.
