Incident: The company released its 2022 mid-year report, achieving revenue of 169 million yuan, a year-on-year decrease of 6.93%; Guimu's net profit was 36 million yuan, a year-on-year decrease of 32.81%, after deducting non-net profit of 33 million yuan, a year-on-year decrease of 29.08%; in the second quarter alone, the company achieved operating income of 78 million yuan, a year-on-year decrease of 14.03%; Guimo's net profit was 17 million yuan, a year-on-year decrease of 15.55 million yuan, after deducting non-net profit of 15 million yuan, a year-on-year decrease of 17.82%. The performance was in line with expectations.
Key points of investment:
It is mainly affected by seasonal fluctuations and dragged down by R&D costs. The company's MEMS product revenue declined in the first half of the year compared to the same period last year, mainly due to seasonal adjustments in major terminal product updates in the previous year. The peak consumer product season in 2021 was mainly concentrated in the first half of the year, and 2022 will follow the release of new fall products by Consumer Electronics. In terms of R&D expenses, the company increased its investment, focusing on projects such as core microcomponents, ultra-high frequency probe test components, board-level test probes, and some micro medical consumables in the AR/VR field. R&D expenses increased 98.53% over the same period last year. R&D expenses accounted for 13.35% of revenue in the first half of the year, an increase of 7.09 pcts over the previous year.
Fundraising increased investment, and the R&D team has formed part of the front and back probe technology reserves. In 2021, the company raised 76 million dollars to implement a semiconductor chip test probe production expansion project through IPO. The target is 8 million high-precision semiconductor test probes per year, 40,000 high-precision semiconductor test bases, 10 million semiconductor test probes per year, 0.72 million semiconductor test bases per year, and target revenue of 149 million per year after delivery; in addition, the company plans to raise capital to increase investment in MEMS and substrate level probes in 2021, covering the target annual revenue of 631 million after delivery. MEMS probe cards 0.4 million pcs/year, MEMS probe card maintenance 0.24 million pcs/year, MEMS probe cards 3 million pcs/year, board level probes 18 million pcs/year, board level jigs 0.12 million pcs/year. According to the company's semi-annual report, its R&D team has carried out related research on MEMS process wafer test probes and substrate-level test probes, and has also formed some technical reserves. Among them, patents such as a MEMS coil spring probe, a MEMS needle with a positioning column structure, a MEMS cantilever probe with an etched tip, a novel linear probe test structure, and a cantilever probe with a reinforced structure have been submitted and are in the review stage.
Chiplet may further boost demand for wafer testing supplies. As the semiconductor process nears its physical limit, Chiplet may become the main form of high-power chips in the future. In the wafer testing process, compared to previous sampling tests, Chiplet chips often require full testing methods to drive the overall demand for testing consumables in order to guarantee the reliability of each die.
Maintain profit forecasts and maintain “buy” ratings. The first half of the year was affected by the epidemic and weak overseas consumption, and demand for consumer electronics-related products was slightly suppressed, but the company's semiconductor test probe products progressed rapidly in the early stages of development and were mainly imported by major customers, and the second half of the year is expected to contribute more as orders are placed. We maintain our profit forecast. The net profit attributable to the mother for 2022-2024 was $157/212/290 million, and the corresponding PE was 44/32/24X. We believe that the company is in the first tier in the domestic test probe field. In the future, as the new industry layout expands categories, it will increase its profitability and maintain its “buy” rating.
Risk warning: customer orders fall short of expectations; industry sentiment falls short of expectations; supply chain risks.