Events:
On October 28, the company released three quarterly reports. In the first three quarters, the company realized income of 1.43 billion yuan, an increase of 56%, and a net profit of 110 million yuan, an increase of 289%.
Comments:
Revenue growth in each section & increase in gross profit margin to drive performance growth
The company released its three-quarter report in 2022. In the first three quarters, the company realized income of 1.43 billion yuan, an increase of 56%, a net profit of 110 million yuan, an increase of 289%, a net profit of 80 million yuan, an increase of 493%, a gross profit margin of 19.6%, and a year-on-year + 1.6pct. Among them, Q3 achieved an income of 590 million yuan in a single quarter, an increase of 42%, an increase of 31%, a net profit of 43 million yuan, a 250% increase, a decrease of 4%, and a net profit of 36 million yuan, an increase of 269%, a ring increase of 27%, a gross profit margin of 20.1%, a year-on-year increase of + 2.3pct, and a month-on-month increase of 1.3pct. The performance growth is mainly due to the increase in revenue and gross profit margin of the company's photovoltaic, new energy, consumer electronics, medical and medical businesses.
Silicon carbide business has made a major breakthrough and is expected to grow in the future.
In September 2022, Tony Semiconductor, a subsidiary of the company, signed a "purchase contract" with downstream customers, agreeing that Tony Semiconductor would deliver 20,000 pieces of 6-inch silicon carbide substrates to the customer, with a total sales amount of 100 million yuan, including tax. Tony Semiconductor has received 50% payment for the contract. At present, the silicon carbide industry is accelerating to reduce costs and increase efficiency, which is at the inflection point of commercial parity, and is rapidly infiltrated in the fields of new energy vehicle driver drive, OBC,DC/DC, optical storage inverter, etc., with its advantages of high pressure resistance, low loss, high heat dissipation and small volume, it is expected to usher in rapid development in the future. At present, the global market for SiC conductive substrates is monopolized by Wolfspeed of the United States, 26 of the United States and Roma of Japan, with a combined share of 90%. There is an urgent demand for domestic alternatives. The company has obtained batch orders from downstream customers, which reflects that the company's SiC substrate has been fully recognized by downstream customers. With the rapid expansion of downstream demand and the increase of domestic share, future growth is expected.
Profit forecast and investment rating: the company's consumer electronics and photovoltaic business categories continue to expand, and silicon carbide business has made a significant breakthrough. We expect the company's return net profit in 2022-23-24 to be 1.5 × 2.2 / 300 million yuan, corresponding to PE times that of 101-69-51, covering for the first time and giving it a "buy" rating.
Risk hint: the progress of technology capacity is not as expected, the downstream demand is not as expected, and the competition in the industry is intensified.