The company is a professional supplier of silicon materials with strong demand for products, covering for the first time the field of silicon single crystal materials for semiconductor discrete devices for ten years for "Buy" rating companies, covering 3-inch 6-inch silicon rods and grinding wafers, etc. At present, the silicon wafer industry and discrete device industry continue to be booming, the demand is strong, the company has strong technical strength, excellent profitability, stable customer resources, while actively expanding production, sufficient growth momentum. We expect that from 2021 to 2023, the company will achieve a net profit of 1.30pm, 170max and 2.58 million, respectively, and the current share price will correspond to 45.6max of PE, which is 23.1 times higher than that of PE, giving a "buy" rating for the first time.
Industry profile: semiconductor wafer market space is large, downstream demand is strong silicon wafer market is the largest part of the semiconductor material market. According to SEMI data, silicon wafers accounted for 35% of the semiconductor materials market in 2020, ranking first in semiconductor materials. According to SEMI statistics, the global wafer market will be 11.2 billion US dollars in 2020. According to IC Mtia statistics, China's wafer market will be 17.63 billion yuan in 2019. In the future, with the increasing demand for 5G, Internet of things, cloud computing and other applications, as well as policy support, the domestic semiconductor wafer market will continue to grow. The wafer industry has high barriers, high concentration, and a high share of foreign leaders. According to core thinking data, wafer CR5 reached 87% in 2020. However, for small silicon wafers, 6-inch and below silicon wafers are mainly provided by domestic suppliers.
With leading technology and cost, raising investment and expanding production, it is expected that the company will have a number of core technologies and patents to optimize the production process through magnetic field crystal drawing, re-feeding direct drawing, diamond wire multi-wire cutting, high-precision heavy doping and other technologies, effectively improve production efficiency, stack the company's regional cost advantages, and reduce production costs. The threshold for supplier certification in the silicon wafer industry is high, and the company currently has a wide range of customers. it has formed a long-term and stable cooperative relationship with Suzhou solid technetium, China Electric Power 46 Institute, Nantong Gaoxin, Yangjie Technology, Shandong Crystal Microelectricity and other well-known enterprises. The company raised about 350 million yuan from IPO on December 8, 2020, of which about 240 million yuan was invested in high-end discrete devices and monocrystalline silicon wafers for VLSI (with a total investment of 615 million yuan). Based on the expansion and reproduction of the existing business, the project is involved in the field of silicon wafers for integrated circuits, which is conducive to giving full play to economies of scale and increasing market share.
Risk hint: the risk that the industry boom is lower than expected, the company's production expansion is not as expected, and the risk of raw material price fluctuation.