Key points of investment:
The company is engaged in the MEMS microelectronic components and semiconductor test probe business. Downstream core customers include global leaders such as Apple and Nvidia.
The probe is a key component in the semiconductor testing process. The localization rate needs to be improved urgently. The semiconductor production process has extremely high precision. Any slight process error may cause the product to fail. The importance of the testing process is particularly prominent, and the test probe is a key component in the testing process.
According to data from VLSI Research, the global probe card market will reach 2,368 million US dollars in 2021 and is expected to reach 2,990 million US dollars in 2026. The top five manufacturers account for 70% of the market share, mainly from overseas. Domestic manufacturers have not yet entered the forefront of the world, and the localization rate needs to be increased urgently.
The probe business focused on major global customers, and raised additional capital to invest in high-end product industrialization company Probes, mainly cost test probes (FT probe 2 pins 02) 1. Sales revenue increased rapidly, with annual revenue of 156 million yuan, an increase of 178.16% over the previous year. Nvidia is the company's core customer. In 2019-2021, sales in the probe business accounted for 56.81%, 57.04%, and 71.20%, respectively. In 2021, the company invested in MEMS wafer-level test probes (CP probes) and substrate-level test probes through additional fund-raising, and invested 4.88 million yuan and 140 million yuan 50 million yuan respectively. Expected revenue was calculated separately after 150 million yuan of production. Formed every year
An important participant in Apple's industry chain, the MEMS fine components business is growing steadily MEMS microelectronic components is the company's basic business. Revenue in 2021 was about 198 million yuan, up 23.76% year on year, and the compound growth rate in 2017-2021 was about 22.03%. The company is one of the important suppliers in Apple's industry chain. Through Goertek, it provides Apple with components such as MEMS shields, structural parts, and connectors. The company focuses on big customers and focuses on the development and manufacture of high-end products. With the experience of serving big customers, it is expected to continue to expand its downstream market share in micro microphones, pressure sensors, etc.
Profit Forecasts, Valuations, and Ratings
We expect the company's revenue for 2022-24 to be 503/697/1,076 million yuan respectively. The corresponding growth rate will be 36%/38%/54% respectively, and the net profit will be 135/198/289 million yuan respectively. The corresponding growth rate is 413%, %/47% /P4E 6%, and EPS is 46/31/21 times, respectively. The DCF absolute valuation method measured the company's value of 72.41 yuan per share. Given the company's high potential in the semiconductor test probe business, combining the absolute valuation method and the relative valuation method, we gave the company 54 times PE in 22 years, with a target price of 90.82 yuan, covering it for the first time, and giving it a “buy” rating.
Risk warning: Risks related to COVID-19, risk of macroeconomic fluctuations, risk of large customer dependency, risk of capacity construction falling short of expectations, and increased risk of industry competition.