Investment summary

Overview of events

On March 30, 2022, the company released its 2021 report, with annual revenue of 370 million yuan, an increase of 61.35% over the same period last year, a net profit of 103 million yuan, an increase of 68.33%, and a non-return net profit of 92 million yuan, an increase of 52.59% over the same period last year.

Comment

(1) the customer continues to break through the order volume, and the production capacity is continuously released to ensure the rapid growth of revenue and net profit.

In 21 years, the revenue of the company's MEMS business reached 198 million yuan, an increase of 23.76% over the same period last year, of which the revenue of fine shields was 156 million yuan, up 10.83% over the same period last year, and that of other MEMS fine parts was 42 million yuan, an increase of 119.11% over the same period last year. This is mainly due to the full sales orders and continuous release of production capacity of the company's MEMS fine micro parts series, and the company has made a breakthrough in the field of optical sensor components. Become the leading customer and qualified supplier in the industry. The company's semiconductor chip test probe business achieved revenue of 156 million yuan, an increase of 178.16% over the same period last year. The main reason is that the company's semiconductor test probe successfully entered the supply chain system of overseas chip designers, and the newly signed orders increased significantly over the same period last year. At the same time, the production capacity of semiconductor chip test probes continues to increase.

(2) the investment in R & D / sales has doubled, the gross profit margin of semiconductor chip test probes has continued to rise, and overseas market development is progressing smoothly.

In 21, the company's R & D expenses accounted for 7.6% of revenue, an increase of 1.4pct over the same period last year, and sales expenses accounted for 3.1% of revenue, an increase of 1.1pct over the same period last year. The company has always attached importance to R & D investment in the improvement of existing products and the development of new products and new processes. In the past 21 years, the company has expanded the high-frequency and high-speed test probe and achieved mass production. The gross profit margin of the semiconductor chip test probe business has also significantly increased to 46.39% 7.48pct. The company has also stepped up efforts to explore overseas markets, obtained the opportunity to verify semiconductor chip test probes from several chip designers, and obtained some orders from several chip designers.

(3) based on the foundation of fine technology, actively carry out forward-looking layout, it is expected to deeply benefit from the high-profile dividend of the industry.

MEMS business: in the context of the rapid development of the Internet of things, 5G and artificial intelligence, the market demand for MEMS sensors is growing rapidly. Yole expects the MEMS market to have + 8.3% value growth and + 11.9% unit growth between 2019 and 2024. Based on the key customer resources and strong technical production capacity in the field of acoustics, the company is expected to open up the growth space through horizontal expansion. Semiconductor chip test probe business: South Korea's Leeno 2021 annual report revealed that revenue for the whole year was about 1.5 billion yuan, an increase of 39.2% over the same period last year, of which socket revenue was about 860 million yuan, an increase of 56% over the same period last year, an increase of about 510 million yuan, an increase of 21.7% over the same period last year, compared with an average revenue growth rate of 12.6% in the past three years. The continuous evolution of technology trends such as Moore's Law and advanced packaging has brought a strong demand in the field of semiconductor closed testing. Relying on the profound accumulation of fine technology and excellent product quality, the company has grown rapidly in the field of FT testing. In the past 21 years, the company has actively issued additional projects to CP testing and high-end substrate testing. It is expected to benefit from the existing major customer resources and rapid opportunities in the domestic semiconductor industry, and become the leading semiconductor chip test probe supplier in China.

Investment suggestion

Maintain a "buy" rating. We estimate that the net profit of the company from 2022 to 2024 is 1.63,2.29 and 322 million yuan respectively, and the corresponding EPS is 2.03,2.86 and 4.03 yuan respectively. The current stock price corresponds to the PE value of 29.78,21.17 and 15.02 times from 2022 to 2024, respectively. We are optimistic that the company's traditional MEMS components expand horizontally from the acoustic field to achieve steady growth, and semiconductor chip test probes benefit from the continuous increase in the share of FT testing and expansion into CP testing and high-end substrate testing, opening up new growth space to achieve rapid growth.

Risk hint

MEMS industry demand, semiconductor probe business, company capacity expansion is lower than expected