Semiconductor test probes: Key consumables for semiconductor testing. Competition in the middle and low end markets is fierce, and domestic enterprises are gradually entering the high-end sector. Semiconductor chip testing mainly includes chip design verification, wafer testing (CP testing), and finished product testing (FT testing). Semiconductor chip test probes are connected to a tester to detect performance indicators such as the conduction, current, function, and aging of the chip. They are key consumables for chip testing. As the chip manufacturing process becomes more and more advanced, the degree of refinement and miniaturization of test probes continues to improve. Benefiting from the rapid growth in global chip shipments, demand for semiconductor test probes has also grown rapidly. According to VLSI data, the market size of the global semiconductor test probe series products reached 1,126 billion US dollars in 2019, accounting for about 10.47% of the semiconductor packaging and testing equipment market. According to this, we estimate that by 2022, the global probe market size will be about 1,619 million US dollars, and the three-year CAGR is about 13%. As high-end products in the field of probes, semiconductor probes are showing an oligopoly trend. South Korea's LEENO industry accounts for the main share of the global semiconductor test probe market. Only a few domestic manufacturers, such as Large and Medium Probes, First Probe, Muwang Probe, Taiyi Electronics, and Lin Weina, have set up factories in China. In 2019, local manufacturers in mainland China and Lin Weina's market share was only 0.24%, while mainland China's wafer production capacity accounted for 20%-30% of the world, and there is vast space for probe localization.

MEMS precision components: The era of the Internet of Everything promotes the continuous growth of the MEMS industry, and upstream components have fully benefited. By integrating subsystems such as microsensors, microactuators, micropower supplies, and mechanical structures into a micron or nanoscale device, the MEMS system achieves miniaturization, intelligence, low cost, low energy consumption, ease of integration and high reliability of electronic products. It has a wide range of applications, and there is plenty of growth momentum under the Internet of Everything megatrends. According to Yole data, the global MEMS market size in 2020 is estimated to reach US$18.2 billion, with a CAGR of 7%. Technology and process development for the manufacture of MEMS precision components such as shielding covers and structural parts is difficult, and the entry threshold for the industry is high. Specifically, in terms of MEMS microphone components, the global MEMS microphone components market space in 2020 is about 116 million US dollars. The downstream MEMS microphone industry clearly has an oligopoly. Goerr, Lou's, and Ruisheng are the main players, and upstream precision parts companies need to grow through continuous cooperation with large customers. Major domestic companies are Ruisheng Technology, and Lin Weina, Galaxy Machinery and Yuyuan Electronics, where Sound is self-supplied.

Weina and Lin: Based on MEMS precision components, semiconductor probes grew rapidly in second place. At the beginning of its establishment, the company mainly produced simple acoustic structural components. Currently, its main products are semiconductor test probes and MEMS precision components. It will continue to grow based on its own technology, customers, and product advantages in the field of precision manufacturing. In terms of MEMS components, the company's MEMS microphone shield products are excellent, which is deeply bound to Goerer's shares, and has been recognized by leading consumer electronics companies such as terminal manufacturers such as Huawei, Apple, and Samsung. At the same time, it continues to expand the range of sensors to open up growth space. At the same time, it continues to expand its range of sensors to open up space for growth. At the same time, it continues to expand its range of sensors to open up space for growth, and uses fine pressure sensors and optical precision sensors in deep cooperation with Honeywell and STMicroelectronics New parts products are on the way Gradually, the MEMS component business is expected to grow steadily. In terms of semiconductor probes, the company's products have been applied in mainstream semiconductor inspection equipment such as TERADYNE (TERADYNE) and ADVANTEST (ADVANTEST). End customers include global IC design leaders such as Nvidia, Qualcomm, Broadcom, ADI, etc., and the scale of performance is growing rapidly. Furthermore, the company will enter the MEMS process wafer test probes (60% market share, mainly used for CP tests) and substrate test probes. The product category will be greatly improved and further opened up for growth Ceiling, future growth can be expected. We expect the company's revenue for 2022-2024 to be 539/719/901 million yuan respectively, net profit of the parent is 1.54/2.17/295 million yuan respectively, and EPS is 1.93/2.71/3.69 yuan/share respectively. The current stock price corresponding to PE is 27/19/14 times respectively. First coverage, giving a “buy” rating.

Risk warning: (1) the worsening of the epidemic has caused terminal demand to weaken, which in turn affects demand to fall short of expectations; (2) the production capacity expansion progress and operation rate of major domestic fabs fell short of expectations; (3) verification and introduction of new semiconductor probe customers fell short of expectations; (4) competition in the MEMS components industry intensified; (5) the worsening of Sino-US relations led to the risk of supply cuts for upstream key equipment