Incidents:
The company issued an annual performance forecast announcement for 2021. It is estimated that net profit attributable to parent company owners in 2021 will be 98 million yuan to 110 million yuan, an increase of 59.61% to 79.15% over the previous year; net profit attributable to owners of the parent company after deducting non-recurring profit and loss will be 87 million yuan to 99 million yuan, an increase of 44.04% to 63.91% over the previous year.
High growth in full-year performance and seasonal fluctuations affected Q4 performance: The company's net profit increased sharply year on year. The main reasons were: (1) sales orders for the company's MEMS microcomponent series products were full, production capacity was continuously released, and revenue and profit increased year-on-year; (2) the company's semiconductor test probes successfully entered the supply chain system of overseas design chip manufacturers through early customer development and product verification. New orders increased dramatically over the same period last year. The company's rapid volume and continuous penetration among clients promoted steady business development. Looking at the Q4 quarter alone, net profit of Fumo is expected to be $15 million to $27 million, a year-on-year increase of -34.78% to 17.39%, and a decrease of 48.28% to 6.90%; net profit after deducting FATF is $113 million to $25 million, a decrease of 51.85% to 7.4% over the previous quarter. Q4 The company's net profit after non-return to the parent declined month-on-month. The main reason was that it was affected by seasonal fluctuations.
Semiconductor test probes are growing rapidly, and the MEMS shield category is expected to continue to expand horizontally:
The company is a leading semiconductor testing probe in China. Its products are mainly used in GPU chips, 5G PA chips, power management chips (WLCSP packaging) and DDR4 memory chips. According to the announcement, the company's products have entered the supply chain of GPU leader Nvidia, and have been applied in mainstream semiconductor inspection equipment such as Teradyne and Edeman. In terms of revenue, the company's semiconductor test probes have grown very rapidly, from 4.88 million in 2018 to 127 million yuan in the first three quarters of 2021, accounting for 45% of revenue. In addition, the company maintains a leading position in MEMS fine shielding covers, has achieved stable mass production with a yield rate of less than 5 ppm. Many core process technologies have reached the international advanced level, and have entered the supply chain system of international advanced MEMS manufacturers. Customer resources and technical advantages are remarkable, market share is expected to increase further, and it is expected that the technical advantages of acoustic fine shielding masks will be transferred to pressure sensors and optical microstructural components to further strengthen their advantages in the MEMS field.
Increased investment in MEMS process wafer test probes further opens up room for growth: the company issued an announcement on November 20, 2021, and plans to raise no more than 700 million yuan in capital. The funds raised are mainly used for: (1) MEMS process wafer test probe R&D mass production projects (invested 440 million yuan); (2) substrate-level test probe R&D and mass production projects (raised 120 million yuan). According to VLSI Research's forecast, the global probe market will reach 2,741 billion US dollars and the domestic probe market will reach 3,233 billion yuan in 2025. Among them, MEMS process wafer test probes already account for about 60% of the probe market.
Currently, the vast majority of the global wafer probe card market is occupied by foreign companies such as Form Factor, MJC, and Techno Probe, and it is rare for domestic companies to participate in global competition. The company's current probe products are mainly semiconductor chip test spring probes. Through this fund-raising project, the company will develop MEMS process wafer test probe products to further enrich the company's product line and open up a wider space for growth.
Investment advice: We expect the company's revenue from 2021 to 2023 to be 406 million yuan, 593 million yuan, and 832 million yuan respectively, and net profit of the mother to be 104 million yuan, 170 million yuan, and 248 million yuan respectively, maintaining the “buy-A” investment rating.
Risk warning: risk of declining downstream demand, risk of market competition, product development falling short of expectations, and customer expansion falling short of expectations.