Event: the company issued a forecast of results for the first three quarters of 2021, and the company is expected to achieve a net profit of 3.2-360 million yuan in the first three quarters of 2021, an increase of 87.20% and 110.60% over the same period last year. The company recently signed a "Project Cooperation Framework Agreement" with ASE Technology Holding Co., Ltd. (Kunshan) Co., Ltd. to cooperate in the "Chip Gold Bump (Gold Bump) full process package and Test Project". The goal of this cooperation project is to establish a Gold Bump closed testing company with excellent and advanced high-end packaging technology. In the first phase of the project, a 12-inch full-process Gold Bump (gold bump) production plant with a monthly capacity of 20,000 tablets will be built, and a wholly-owned subsidiary of Kunshan Tongxingda Semiconductor will be established.
Comments: we are optimistic that the company will continue to promote intelligent and digital lean management to help profitability, and that this cooperation project will improve the company's core competitiveness and operational efficiency. In the single quarter of 2021Q3, the company expects to achieve a net profit of 1.14-154 million yuan, an increase of 28.60% to 73.86% over the same period last year, and an increase of-21.25% to 6.46% on a month-on-month basis. The company continues to promote the construction of a high-end intelligent factory, and has achieved the goal of the first stage: the intelligent factory has high management standardization, high production efficiency, excellent product quality, and the production efficiency and yield of the factory are in the leading level in the industry. it is expected that the company's product efficiency and cost control will be significantly improved.
The closed test project maintains a high degree of coordination with the company's main business, and the company has reached a project cooperation with the Sunlight team, which will help the company to extend its layout to the front end of the industrial chain and open up new performance growth points, so as to improve the company's comprehensive competitiveness and improve business efficiency and profitability. therefore, the company established Kunshan Tongxingda Semiconductor Company with a registered capital of 750 million. In terms of order acquisition, the company shows that the module business provides market verification support for products, which can ensure the adequacy of orders to a certain extent. The chip closed test needs trial production verification in the early stage. After the project is put into production, the company can make use of its market advantage of driving IC downstream applications, cooperate with the closed test factory to further debug the manufacturing process and technical parameters, and strive to complete the verification and mass production in as short a time as possible.
Access to the industry's leading technical support to ensure rapid mass production, quality rate. Sun and Moon Group has become the world's largest semiconductor integrated circuit packaging and testing service company in 2003. It has the most complete supply chain system in the global package and testing industry. Kunshan Sun and Moon Group is a subsidiary of Sun and Moon Group. The advanced packaging gold bump production process involved in this project requires the use of UBM coating and lithography and other difficult processes, not only need to purchase supporting equipment according to the characteristics of the product process, and need to be debugged and trial-produced by a professional team, in this process specific equipment needs continuous operation and input, if there is no professional and reliable technical team, a lot of time and resources will be spent in the early stage. ASE Technology Holding Co., Ltd. is selected to be responsible for technical and personnel matters in this project. Sun and Moonlight has rich and mature technology and project experience, which can ensure rapid mass production and stable product yield to the maximum extent.
The Gold Bump closed test market has a broad prospect and a good market pattern. This cut into the advanced packaging, especially the flip chip market is broad. According to Yole's forecast, the proportion of advanced packaging will increase to 49.4% of the overall closed testing industry in 2025, of which flip is the largest market in advanced packaging. The size of the advanced packaging market in 2018 is about US $28 billion, of which the flip market is about US $22.4 billion, accounting for 80% of CAGR in 2018-2024. Chinese mainland Gold Bump closed test capacity is low, now is the best time to enter this market segment.
Investment advice: the company's 21-23 net profit is forecast to be 5000,000,000 yuan, with a target price of 65.30 yuan, maintaining a "buy" rating.
Risk hint: the competition in the advanced closed test market intensifies; the factory efficiency is not as good as expected; the downstream demand of advanced closed test is lower than expected, and the production capacity of new projects is not as expected.
