Incidents:
The company released its 2022 semi-annual report. In 2022, H1 achieved 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%; and Fumo's net profit after deduction was 33 million yuan, a year-on-year decrease of 29.08%.
Performance is under pressure in the short term, and R&D expenses have increased dramatically to invest in the future
Looking at the single quarter of Q2 2022, revenue was 78 million yuan, down 14.03% from the previous year; net profit of the parent was 017 million yuan, down 15.55% from the previous year; gross margin and net interest rate were 43.50% and 21.85% respectively, with year-on-year changes of 2.57 and -0.39 percentage points respectively; sales expenses and management expenses ratios were 4.49% and 5.21% respectively, with year-on-year changes of 0.98 and -0.13 percentage points respectively; the R&D expense ratio changed significantly, reaching 15.11% in 22Q2, up 7.37 percentage points from the previous year. Research and development focuses on projects such as MEMS microcomponents, ultra-high frequency probe test components, and substrate-level test probes used in the AR/VR field.
A small giant specializing in fine manufacturing, the semiconductor probe business prospects can be expected. The main reason for the year-on-year decline in the company's revenue was a slight decline in microelectromechanical (MEMS) microelectronic component revenue. The first half of 2022 was affected by multiple factors such as the epidemic, geopolitics, and inflation. Consumer electronics boom was sluggish, driving a decline in upstream industry chain performance. The probe business is expected to continue to grow at a high rate. The company has obtained the opportunity to test probes from several chip design manufacturers and has obtained partial orders from several chip design manufacturers. In the first half of the year, the company invested a lot of R&D expenses for MEMS wafer-level test probes and other projects. The R&D team has carried out research on MEMS process wafer test probes and substrate-level test probes, and has formed some technical reserves. Recently, the company was selected for the “Fourth Batch of Specialized, Special and New 'Little Giants' Enterprises List” at the national level, and its technical strength was highly recognized.
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 is 36%/38%/54% respectively, and the net profit is 135/198/289 million yuan respectively. The corresponding growth rate is 31%/47%/46% respectively, EPS is 1.69/2.47/3.61 yuan per share, the 3-year CAGR is 41%, and the corresponding PE is 51/35/24 times, respectively. In view of the high potential of the company's semiconductor test probe business, maintain “buying”
ratings.
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.