Research Report: MEMS Integrated Microphone, E-cigarette Business Prospects

On June 3rd, Huaxin Securities released a research report titled "Company Dynamics Research Report: MEMS Integrated Microphone Iteration Year, Company's e-cigarette Business Expected to Further Advance." The report stated that Minxin Technology (688286) has made significant progress in MEMS integrated microphone technology, and its e-cigarette business is expected to grow further. Minxin Technology has been given a "buy" rating.

The global e-cigarette market sales reached 79.39 billion yuan in 2023 and are expected to increase to 293.53 billion yuan by 2030, with an average annual growth rate of 20.54%. China, as a major exporter of e-cigarettes globally, saw its e-cigarette product exports reach 11.08 billion US dollars in 2023, a year-on-year increase of 12.48%. With the expansion of the global market, the e-cigarette market in China is also expected to grow.

The report points out that compared to traditional condenser microphones, MEMS microphones have significantly improved performance in terms of high temperature resistance, waterproofing, oil resistance, and anti-volatility, solving the common problems of condenser microphones. At the same time, MEMS microphones also have significant advantages in production yield and consistency. With the intensifying competition in the e-cigarette market and the increasing consumer demand for product experience, it is expected that by the second half of 2024, the e-cigarette industry will achieve a MEMS microphone coverage rate of over 50%.

The company began developing MEMS differential pressure sensors in 2019 and has been providing customized chip development and application design for customers. As of March 2024, the company has shipped over 100 million MEMS differential pressure sensors, including MEMS switch microphones, MEMS only microphones, and MEMS solution modules. In response to market demand, the company has a monthly packaging and testing capacity of over 50 million sensors, and plans to increase this to 100 million per month by 2024.

Huaxin Securities predicts that Minxin Co., Ltd.'s revenue for the years 2024 to 2026 will be 485 million yuan, 628 million yuan, and 820 million yuan respectively, with earnings per share (EPS) of -0.30 yuan, 0.43 yuan, and 0.72 yuan. The current stock price corresponds to price-earnings ratios of -141 times, 100 times, and 60 times respectively. As a leading global manufacturer of MEMS sensors, Minxin Co., Ltd. has achieved significant success in the acoustic field and is expected to further increase its market share in the MEMS differential pressure market in the future.

Although the outlook is positive, the report also highlights risks in the e-cigarette industry such as slower than expected development, tightening regulatory policies, lower than expected penetration rates of MEMS microphone heads, and intense competition. Companies need to continuously monitor market changes, maintain a leading technological position, in order to meet potential challenges.

According to reports, Micromachined Semiconductor Technology Co., Ltd. based in Suzhou, was founded in 2007 and played a leading role in building the MEMS industry chain in China. In August 2020, it successfully listed on the Science and Technology Innovation Board of the Shanghai Stock Exchange (stock code 688286), earning the reputation as the first stock of MEMS chips. It is currently one of the few enterprises in China that possess the capability to design and manufacture a variety of MEMS chips. With 4 subsidiary companies, it is a pioneer in the research and development of the entire MEMS industry chain and in localizing production.