2023Q1 profits are under pressure, and the semiconductor equipment business opens up room for growth. The company released a report for the first quarter of 2023. 2023Q1's revenue was 220 million yuan, up 5.53% from the previous year; the mother's net profit was 55 million yuan, -9.23% year on year. We lowered our earnings forecast for 2023-2025. It is estimated that the net profit attributable to the parent for 2023-2025 is 32/44/62 million yuan (the original value for 2023-2025 was 35/47/ 650 million yuan), EPS is 129/175/2.47 yuan, and the current stock price corresponds to PE 23.8/17.5/12.5 times. The company is a leading electronic assembly company in China, and its gross margin remains above 50% all year round. Based on precision welding technology, the company upgraded to a semiconductor packaging and testing equipment solution provider, opening up room for growth and maintaining the “buy” rating.
The company's main business grew steadily, with high dividends for many years. Short-term performance put pressure on the company's steady growth all year round due to the recovery in downstream demand falling short of expectations. Dividends increased rapidly. In 2021, shareholders were paid a cash dividend of 13 yuan for every 10 shares, with a total cash dividend of 248 million yuan, an increase of 98.4% over the previous year. It is proposed to distribute a cash dividend of $10 for every 10 shares to shareholders in 2022. The gross profit margin of 2023Q1 company sales was 51.24%, a year-on-year decrease of 2.3 pcts. The net profit margin on sales was 25.48%, down 4.4 pcts from the previous year. The sales expense ratio was 8.38 pcts, an increase of 1.5 pcts over the previous year, the management expenses ratio was basically the same as the previous year, and the R&D expenses ratio was 13.22%, an increase of 2.0 pcts over the previous year. The 2023Q1 macroeconomic recovery fell short of expectations, and the company's profit side is under pressure in the short term, but the medium- to long-term growth trend is improving.
The semiconductor equipment business has landed, and domestic substitution opens up space for long-term growth. Precision welding and semiconductor packaging solid crystal bonding process technology are compatible. The company's shift from 3C equipment to semiconductor equipment is in the same vein in terms of welding technology and automation capabilities. In 2022, the company's IGBT multifunctional solid crystal machines and formic acid soldering furnaces have all entered the adjustment and proofing stage; equipment such as vacuum welding furnaces for power semiconductors and laser decoupling of IGBT carrier boards achieved tens of millions of levels of delivery; micro-nano metal sintering equipment, as “stuck in the neck” equipment in third-generation semiconductor packaging, has met the order expectations of leading domestic customers. The company's semiconductor packaging equipment test center will be completed at the end of April 2023 to provide customers with one-stop services from proofing to verification. The future release of multiple types of semiconductor packaging equipment will open up room for long-term growth.
Risk warning: The progress of semiconductor equipment production falls short of expectations, and macroeconomic fluctuations affect demand for soldering equipment.