Incidents:
The company recently released its 2022-year annual report. In 2022, the company achieved revenue of 1.89 billion yuan, an increase of 41.0%; Guimu's net profit was 110 million yuan, an increase of 223.4% over the same period. Net profit of non-return mothers was 66 million yuan, an increase of 369% over the same period.
Comment:
The silicon carbide business benefits from industrial shortages, downstream production expansion+domestic substitution opportunities. In January 2023, the company announced a procurement contract between Tony Semiconductor, a wholly-owned subsidiary, and downstream customer T. It was agreed that Tony Semiconductor would deliver 135/30/500,000 6-inch SiC substrates in 2023/2024/2025 respectively, which is expected to contribute 7/135/2.15 billion yuan in revenue. Among them, the company expects to deliver the technologically difficult SiC MOS ratio of 20%/50%/55% year by year, which highlights the company's technical advantages in SiC substrates.
Consumer electronics/photovoltaic/medical/new energy continued to increase, and net profit increased sharply year over year. By business, the gross margin of consumer electronics revenue bucked the trend, mainly due to the company's deep cooperation with downstream customers, compounding the impact of cost reduction and efficiency gains and the appreciation of the exchange rate of the US dollar against the RMB. As one of the few nanocrystalline suppliers that can enter the supply system of internationally renowned mobile phone manufacturers, the company has a competitive advantage in this field. PV revenue increased 297% at the same time: diamond cutting line technology continued to improve, order volume increased, and gross revenue and profit increased dramatically.
Solar film has become a revenue contribution point for this business in 2022. Revenue from new energy sources increased 55% and gross margin increased by 10.6 pct. Products such as wiring harnesses and poles maintained a good development trend. Medical revenue increased 37% and gross margin increased by 2 pct. The company has become a qualified supplier for leading domestic medical device customers and is cooperating with other high-quality domestic and foreign customers to send samples for verification. Semiconductors: Phased results have been achieved. In the future, the company will focus on technology research and development while actively promoting mass production.
Profit forecast and valuation: We expect the company's net profit to be 15/ 210 million yuan in 2023/2024, corresponding to PE 88/62 times. Considering the high growth and scarcity of the company's silicon carbide business, we will maintain the “buy” rating.
Risk warning: business progress falls short of expectations; the penetration rate of new energy vehicles falls short of expectations