Main points of investment

The net profit of returning to the mother in 2021 was 146 million yuan, an increase of 67.81 percent over the same period last year.

In 2021, the company achieved a total operating income of 2.467 billion yuan, an increase of 36.19% over the same period last year, a net profit of 146 million yuan, an increase of 67.81% over the same period last year, and a net profit of-132 million yuan, reducing a loss of 149 million yuan over the same period last year. The non-recurrent profit and loss is mainly 291 million yuan of government subsidies; the substantial increase in performance is mainly due to the strong demand in the semiconductor market, while the company's production capacity continues to rise, production and sales have increased significantly, and the scale effect has gradually emerged.

300mm silicon wafer production capacity is effectively released, further consolidating the domestic leading position.

In 2021, the company's 300mm semiconductor wafer production line of 300,000 wafers per month was completed, which has become the largest mass production of 300mm semiconductor wafer positive products in China, and has achieved full coverage of logic, storage, image sensor (CIS) and other applications. During the reporting period, the company sold 175.16 million 300mm semiconductor wafers, an increase of 93.63 percent over the same period last year; operating revenue of 688 million yuan, an increase of 117.94 percent over the same period last year; and a gross profit margin of-6.17 percent, an increase of 28.65pct over the same period last year. At the same time, the company has started the construction of an additional 300,000 wafer / month 300mm wafer production capacity, with a construction period of two years. After the completion of the project, the company's total 300mm wafer production capacity will reach 600,000 wafer / month. In addition, the company's 200mm and the following silicon wafer production capacity further increased, product structure optimization. At the end of the reporting period, the company's total production capacity of polished wafers and epitaxial wafers for 200mm and below exceeded 400,000 wafers / month, and that of 200mm and below SOI wafers exceeded 50,000 wafers / month.

14nm process 300mm semiconductor wafer to achieve batch supply, customer certification and shipping speed.

In 2021, the company spent 126 million yuan on R & D, accounting for 5.1% of the operating income. The Ministry of Science and Technology "02 project"20-14nm integrated circuit 300mm wafer technology development and industrialization" has passed the acceptance; "300mm defect-free wafer R & D and industrialization" project has made a major technological breakthrough. The company successfully passed the technical certification of 300mm semiconductor wafers for 14nm logic products, realized the batch supply of 300mm semiconductor wafers for 14nm process node applications; successfully developed and verified 300mm semiconductor wafers for 19nm DRAM, and made a breakthrough; successfully passed the certification of 300mm polished wafers for 64-layer and 128-layer 3DNAND applications and realized mass supply. At the same time, the company's 300mm wafer certification cycle began to shorten, which is conducive to speed up the rapid introduction and volume of the company's products in downstream customers.

Profit forecast and valuation

The company is the leading semiconductor wafer in China, with a 12-inch wafer production capacity leading the country, and product certification is progressing smoothly.

We estimate that the return net profit of the company from 2022 to 2024 is 2.14,2.98 and 426 million yuan respectively, the corresponding EPS is 0.08,0.11,0.16 yuan per share, and the corresponding PE is 279,200,140 times respectively.

Risk hint: market competition intensifies and customer certification falls short of expectations.