Event: On October 28, 2022, the company released its report for the third quarter of 2022: the company's revenue for the first three quarters of 2022 was 1,925 million yuan, an increase of 50.13% over the previous year; net profit of 163 million yuan, a decrease of 13.55% over the previous year; net profit after deducting non-return to the mother was 186 million yuan, up 130.54% year on year; gross margin was 35.48%, up 0.09pcts year on year; net interest rate was 8.73%, down 5.69pcts year on year.
The company's revenue in Q3 2022 was 806 million yuan, up 122.51% year on year in a single quarter; net profit of the mother was 80.1 million yuan, up 115.60% year on year in the single quarter; net profit after deducting non-return to the mother was 88 million yuan, up 133.25% year on year in the single quarter; gross margin was 34.63%, and the net interest rate was 10.06%.
Comment: The company's 22Q3 revenue was +123% year on year, net profit +116% year on year, and after deducting non-net profit +133% year on year, all achieved more than double growth. The company's 22Q3 revenue was +123% year on year, mainly due to a sharp increase in high-purity systems and semiconductor equipment business orders; the net profit of the mother was +116% year on year, and net profit of the non-return mother was +133% year on year, all of which achieved more than doubled growth, and the performance was good.
The company's net profit for 22Q4 after deducting non-return income is expected to increase 40-76% year-on-year. The company expects net profit of 300-33 billion yuan after deducting non-return to the mother for the full year of '22, and 186 million yuan of net profit after deducting non-return to the mother for the first three quarters of '22. From this, it is estimated that 22Q4 net profit after deducting non-return mother's net profit will be in the range of 14—144 million yuan, an increase of 40-76% over the previous year. The profitability performance is good.
The company added a total of 3.621 billion new orders in the first three quarters of 22. The order volume was saturated, and it is expected that the whole year will exceed expectations. The company added a total of 3.621 billion yuan in new orders in the first three quarters of '22, which has already achieved 90.5% of the total annual target of 4 billion yuan. It is expected that the whole year will exceed expectations. The company's orders are growing rapidly, and production is currently running at a saturated state.
The company continues to release semiconductor wet processing equipment, and the proportion of supporting equipment in high-purity systems continues to increase. Semiconductor wet method equipment: The company has obtained batch orders from mainstream domestic logic chip manufacturers, and has successively received orders and verification opportunities from major domestic storage customers. Currently, its main products, including SPM and crystal back cleaning, have been recognized by first-tier customers and received continuous orders in the downstream core process segments, with an estimated additional order volume of 2 billion yuan throughout the year; high-purity systems: supporting equipment includes high-purity special gas equipment, high-purity chemical supply equipment, grinding fluid supply equipment, precursor supply equipment, process exhaust liquid treatment equipment, dry machine gas supply modules, etc., gas and chemical equipment domestic gas production, gas and chemical equipment Substitution is progressing smoothly. It has become an approved brand for mainstream integrated circuit manufacturing customers, and shipments are growing rapidly, and the share of support equipment in the high purity business continues to increase.
Actively lay out semiconductor components and electronic bulk gas businesses. The company set up component cleaning and wafer recycling business in Hefei, and the component manufacturing business at the Haining plant, which is expected to enter the release period. DaZongqi's Jiading plant successfully supplied gas in early '22, making it the first fully localized bulk gas supply plant with advanced processing for 12-inch wafers.
Profit forecasting, valuation and ratings: We maintained net profit of Pure Technology until 22-24 at 381, 555, and 726 million yuan respectively. The PE corresponding to the current market value is 32x, 22x, and 17x respectively, maintaining the “buy” rating.
Risk warning: Localization progress falls short of expectations, fab expansion falls short of expectations, and technology research and development falls short of expectations.