Key points of investment:
Incident: Shanghai Zhi Chun Clean System Technology Co., Ltd. invested 5 million yuan to participate in the Shanghai Junshi venture capital partnership. The Shanghai Junshi Fund raised 30,000 yuan, accounting for 1.67% of Zhi Chun's investment.
New orders for semiconductor wet process equipment are growing rapidly. In 2019-2021, new annual orders amounted to 1,42/1,996/3.23 billion, respectively. The company laid out wet equipment research and development in 2015, and new orders for wet equipment in 2019-2021 were 17/53/1.12 billion yuan respectively. For 2022H1, the total number of new orders placed by the company was 2,362 million yuan, an increase of 37.33% over the previous year. Among them, orders for semiconductor process equipment were added at 806 million yuan, and the semiconductor sector accounted for 82.50% of new business orders. In 2022, the target for new orders for process equipment was 2 billion yuan, which still maintained a rapid growth rate of more than 50%.
Advanced processes and special processes have made breakthroughs, and orders for single-piece cleaning equipment are growing rapidly. In 2021, the company received repeated orders from 13 users, and developed 10 new users during this period, all major wafer manufacturers. New orders for 12-inch wet equipment exceeded 600 million yuan, of which orders for single-piece wet equipment exceeded 380 million yuan, accounting for more than half; the company has obtained a full range of 28nm certifications (including wet etching, glue removal, cleaning, brushing, etc.), the first batch of single-piece wet equipment has been delivered and successfully verified, and 4 wet equipment orders have been received for processes below 14nm. The wet process equipment business, especially the single-chip equipment business, has entered the stage of accelerated release, which has become a new growth point for the company's performance. In the special process category, the company also received an order for wet equipment for the entire line on the gallium nitride and silicon carbide production lines in 2021.
By introducing industrial capital support such as the second phase of the Big Fund and SMIC Juyuan, we are participating in the Shanghai Dundong trend to strengthen the investment layout. In 2021, the holding subsidiary Zhi Wei Semiconductor (Shanghai) introduced strategic investors through capital increase holding methods, including Big Fund Phase II, SMIC Juyuan, Equipment and Materials Fund, Yuanzhi Spark, Xinxing Rubber, etc. Before this capital increase, the valuation of Microtech was 2.5 billion yuan, and after the transaction, the proportion of shares held by listed companies in Zibo Technology dropped from 99.3407% to 77.11%. The participating investment fund actively lays out promising strategic emerging industries, fully explores and incubates high-quality projects in the field of high-end equipment manufacturing and next-generation information technology, and can generate business collaboration with listed companies and enhance market competitiveness in the future.
Based on a high-purity process system, semiconductor wet process equipment and wafer regeneration are arranged, and semiconductor business strategies are integrated in one. The company continues to expand its semiconductor-related business fields, from high purity process systems to wet process equipment. Since 2021, the Hefei wafer recycling project has officially climbed mass production. The Hefei layout wafer regeneration and component cleaning project is the first 12-inch wafer recycling line to be put into operation in China. The component cleaning project is the first in China to set up a complete anode production line, with an annual output of 1.68 million wafers and 1.2 million semiconductor component recycling capacity. The company has formed a strategic layout that integrates equipment, materials, and processes for the semiconductor industry.
Adjust profit forecasts to maintain “buy” ratings. Due to declining investment income expectations, the 2022/23 net profit forecast to the mother was lowered from 421/524 million yuan to 330/452 million yuan, adding 538 million yuan to the 2024 forecast. As far as Pure Technology 2023PE30X, it is far below the 2023 average PE of Shenwan's semiconductor equipment sector by 84 times, maintaining the purchase rating.
Risk warning: cleaning equipment orders fall short of expectations; new production capacity falls short of expectations; risk of investment failure or loss.
