Revenue in the first quarter of 2022 is + 95.1% year-on-year, month-on-month + 12.6%, year-on-year net profit + 211.4%, month-on-month-22.9%. Revenue exceeds our expectations and profits are in line with expectations. The company's revenue in the first quarter of 2022 was $595 million, up 95.1% from a year earlier, up 12.6% from a month earlier, and its net profit was $103 million, up 21.4% from a year earlier, down 22.9% from a month earlier. The company's revenue performance was eye-catching, exceeding our previous expectations, mainly due to the ASP improvement brought about by the upsurge in the industry boom and product structure adjustment; the profit side as a whole met expectations.
Affected by government subsidies, the apparent gross profit margin declined. 2022Q1, the company's gross profit margin of 26.9%, up 3.2pcts from the same period last year, decreased 5.6pcts from the previous month, the main reason for the decline is the adjustment of government subsidy programs. According to the 22Q1 financial report, 21Q4's 8-inch gross profit margin was 45.4% (40% at the time of the disclosure of the quarterly report in 21), mainly due to a change in the recognition time of government subsidy programs deducting costs. To restore this project, the actual gross profit margin is in line with our expectations.
The eight-inch line maintains a high crop growth rate, and ASP continues to improve. 2022Q1, the company's 8-inch line has a capacity utilization rate of 107.7%, a revenue of US $333 million, and a slight increase in ASP. We believe that strong downstream demand such as power and simulation will continue to drive the 8-inch line to maintain high capacity utilization.
Taking into account the above-mentioned adjustment of government subsidy programs and the relative impact of the epidemic, the company's gross profit margin is in line with our expectations. Throughout the year, the production line will still achieve a high gross profit margin.
The expansion progress of the 12-inch line is in line with expectations, and ASP has increased steadily. 2022Q1, the company's 12-inch line achieved revenue of US $262 million, an increase of 27.4% over the previous month. Wuxi 12-inch factory reached 65k month capacity in 22Q1, the production expansion progress was in line with expectations, and the capacity utilization rate was 103.9%, which continued to maintain full load. The company's 12-inch single-quarter gross profit margin is 12.0%. Looking ahead to 2022, we believe that the company's capacity release has a good pace, and the increase in ASP and the improvement in gross profit margin will lead to a significant improvement in overall profitability.
Science and technology pioneering version on the market, back to A funds to ensure the follow-up expansion of production. On May 12, 2022, the company announced that it planned to list in the Science and Technology Innovation Edition, and that the shares planned to be issued would not exceed 25% of the total share capital after the issue. Of these, about 70% (RMB 12.5 billion) is invested in Huahong Manufacturing Wuxi project, about 11% (RMB 2 billion) is used for optimization and upgrading of 8-inch wafer plants, and about 13% (RMB 2.5 billion) is used for process technology innovation and research and development projects. About 6% (RMB 1 billion) is used to supplement working capital. We believe that the company will continue to expand production in the future, and the funds raised back to A will provide an important guarantee for long-term development. At the same time, the return to A will also provide strong support for the valuation of the company's shares in Hong Kong.
Profit forecast and investment rating: combined with downstream demand and the company's progress of production expansion, the net profit of 2022 will remain unchanged, and the net profit of 2023 will be increased to $350 million (+ $10 million). The new forecast of net profit of 2024 will be $427 million, which is + 13%, + 18% and + 22% respectively compared with the same period last year, and the corresponding current price (May 14) PE is 19 times, 16 times and 13 times respectively. Corresponding to the current price (May 14) PB is 1.8x, 1.7x, 1.5x respectively, maintaining the "buy" rating.
Risk hint: industry demand is lower than expected risk, Wuxi plant climbing is slower than expected risk, gross profit margin improvement is weaker than expected risk, Sino-US trade friction aggravates risk