Incident: Meiai Technology released its 2022 annual report. The company achieved revenue of 1,227 million yuan in '22, an increase of 6.72% over the previous year; it achieved net profit of 123 million yuan (113 million yuan after deduction), an increase of 13.70% over the previous year (6.99% year-on-year increase after deduction).
Efficient management has reduced costs and increased efficiency, and the company's profitability has improved. The company's gross margin for the full year of 2022 was 27.82%, an increase of 0.91 pct over the previous year, and the net interest rate was 10.10%, an increase of 0.75 pct over the previous year. In 2022, the company's R&D expenses were 52 million yuan, an increase of 10.6% over the previous year, accounting for 4.21% of the company's operating income, an increase of 0.13 pct over the previous year. The company led domestic manufacturers in terms of the number of patents, product parameters, brand reputation, and market share. At the end of 2021, it won the title of a new “little giant” with national expertise. During the reporting period, the company actively developed the market. The scale of business revenue increased over the previous year, and overall sales performance improved. At the same time, the company managed efficiently and continued to reduce costs and increase efficiency, which led to an increase in profit levels compared to the same period last year.
The company is a domestic semiconductor cleanroom industry leader. The company's main business focuses on ultra-clean semiconductor plants. It is a leader in the localization of clean equipment (fan filter units) and consumables (filters) in the semiconductor field, with a market share of around 30%. In 2022, the company's clean room air purification sector accounted for 71.16% of revenue, indoor air quality optimization accounted for 20.62% of revenue; air pollution emission control accounted for 8.21% of revenue.
Clean room air purification is the company's core business.
Accelerate the deployment of overseas markets and enter the supply chain for core international customers. Based on the Chinese market, the company continues to expand into emerging semiconductor industries such as Southeast Asia. Currently, it already has 6 domestic production bases and 2 overseas production bases. In the future, the company will continue to develop markets in the European Union, North America and the Middle East. In addition, the company has passed the qualified supplier certifications of many internationally renowned manufacturers and has carried out substantial commercial business. The certification of famous manufacturers is expected to bring convenience to the company's overseas development and help the company accelerate the global business of other internationally renowned manufacturers. The company's overseas business revenue in 2022 was 130 million yuan, accounting for 10.6% of total revenue, and the 2019-2022 CAGR was 49.4%. In recent years, the company relied on overseas production bases and overseas sales, and the scale of overseas revenue grew rapidly.
The fund-raising project is expected to be put into operation in the second half of the year, and the company's production capacity will increase significantly. According to the company's prospectus, in the first half of 2022, the production capacity utilization rate of the company's fan filter units and filter products all exceeded 100%. In 2021, the company's fan filter unit production capacity was 253,500 units, and the total production capacity of filter products was 2.249 million pieces. To solve the shortage of production capacity, the company plans to invest 423 million yuan to expand the capacity of the Nanjing production plant in the second phase. After production is put into operation, 240,000 fan filter units and 1.92 million filter products will be added respectively. According to the minutes released by the company, construction of the second phase of the project began in early July 22, and production is expected to begin in the second half of '23. After full production, production capacity can reach 1.5 times the current production capacity of the Nanjing plant, which is expected to ease the shortcomings and bottlenecks of the current insufficient production capacity.
Investment advice: It is estimated that the company's net profit for 2023/2024/2025 will be 176/2.28/267 million yuan respectively, the corresponding EPS will be 1.31/1.70/1.99 yuan/share respectively, and the corresponding PE will be 29x/22x/19x respectively, covered for the first time, and given a “recommended” rating.
Risk warning: risk of project construction falling short of expectations; risk of policy support falling short of expectations; risk of increased industry competition.