The third quarter results are under pressure, increase production capacity and R & D investment, growth is expected, maintain the "buy" rating
The company released a performance report, with revenue of 1.285 billion yuan in the first three quarters of 2022, down 4.55% from the same period last year, and net profit of 293 million yuan, down 24.54% from the same period last year. In the single quarter of 2022Q3, the company achieved revenue of 445 million yuan, down 4.30% from the previous quarter, and realized net profit of 81.26 million yuan from the previous quarter, down 27.36% from the previous quarter. Due to weak consumer demand, the company's thyristor and other stock businesses are under pressure, resulting in a year-on-year decline in revenue and profits. We downgrade our profit forecast and expect the company's 2022-2024 net profit to be 6221,817 million yuan (the original value is 512Universe 7591,985 million), corresponding to 1.11 yuan of EPS 0.54 pound, and the current share price is 16.8 times that of PE. In the face of fluctuations in the industry, the company insists on increasing R & D investment, steadily advances the construction of a number of key capacity projects, is optimistic about the company's long-term development, and maintains a "buy" rating on the company.
With continuous R & D investment, the proportion of MOSFET revenue has increased significantly.
The company continues to strengthen the research and development of Agile Wuxi VD MOS, SJ MOS and other products such as Shanghai SGT MOS, advanced TVS, advanced rectifier devices, etc., with a 2022Q3 R & D expense rate of 14.45%, an increase of 5.15 pct compared with the previous month. The company's MOSFET sales share has increased significantly, and has entered new energy vehicles, photovoltaic, energy storage and other high-threshold, high-growth markets, is expected to drive the company's MOSFET revenue sustained and rapid growth, and further improve the company's product structure.
With the expansion of production against the trend and a substantial increase in the amount of projects under construction, a number of production capacity construction projects of Xu Li Company have been steadily advanced for follow-up growth. The balance of projects under construction at the end of the third quarter was 2.177 billion yuan, an increase of 1.416 billion yuan over the beginning of the year. The first phase of infrastructure and supporting facilities of the "High-end Power Semiconductor industrialization Construction Project" of Jetty Nantong Technology has been completed and put into production in September, which is expected to provide sufficient wafer capacity support for the company's MOSFET products. Company's "6-inch power chip and closed test production line and supporting construction project"
And the construction of the "power semiconductor vehicle specification-level industrialization project" and other projects have also been steadily advanced. At a time when the demand of some industries is under pressure, the company carries out product upgrading and production capacity construction against the trend to fully accumulate strength for subsequent growth. The company is expected to rely on the IDM model of long-term cost, process, quality control, delivery and other advantages to further improve the market share.
Risk tips: new product development and promotion is not as expected, downstream demand is not as expected, new production line expansion and yield is not as expected.