Incident: Meiai Technology released its 2022 performance report: the company achieved full-year revenue of 1,227 billion yuan, an increase of 6.72% over the previous year; realized net profit of 123 million yuan, an increase of 13.82% over the previous year.
Complex factors influence 2022 results: Meier Technology's products are part of the semiconductor cleanroom, and the acceptance period for this type of engineering project is long. Air purification projects require the cooperation of comprehensive capabilities in various fields such as quality inspection and control, and project site operation and commissioning. The construction and acceptance progress of downstream customer projects in Q4 2022 was disrupted, which affected the performance of Meier Technology in 2022 to a certain extent. As normalization resumes, delayed confirmation of performance revenue is expected to be released centrally in 2023.
The global layout is integrated into the supply chain of large customers: Meier Technology has more than 20 years of R&D investment and experience, and has entered the supply chains of customers such as SMIC, Shanghai Microelectronics, BOE, etc., and its products meet the needs of 3nm manufacturing plants. The company is actively exploring overseas markets in Southeast Asia, accounting for about 15%-20% of overseas orders and growing rapidly. Through its global presence, US-Egypt Technology is expected to continuously increase its market share in the field of air purification.
The production expansion plan is progressing steadily to ensure future supply capacity: Mei'e Technology's second phase expansion project was launched in early July 2022. Production is expected to begin in the second half of 2023. After full production, production capacity can reach 1.5 times the current production capacity of the Nanjing plant, which can meet the company's business growth needs from 2023 to 2024.
Filter replacement is expected to contribute long-term stable benefits: The filter built into the Meier fan unit has a certain service life and needs to be replaced regularly. As the market stock of the company's products continues to expand, the demand for replacement filters will increase. By selling new filters to replace existing customers, the company is expected to receive long-term continuous revenue.
Investment proposal: Taking into account the progress of electronics factory production expansion and the demand for air purification equipment in the industrial and building sectors, we expect the company's 2022-24 revenue to be 12.27/16.37/2.146 billion yuan, net profit of 1223/1999/276 million yuan respectively, and the corresponding PE of 45.65/28.23/20.38 times, giving it an “increase in holdings” rating.
Risk warning: The downturn in the semiconductor market is compounded by overseas supply risks, domestic fab equipment procurement is slowing down; high-end product development progress falls short of expectations; industry competition is intensifying.