Event

Recently, according to Jingsheng official WeChat news, the company has delivered 8 inch silicon carbide crystal equipment to a number of customers, some customers have achieved certain research and development results, and are constantly optimizing the process.

Main points of investment

Silicon carbide + semiconductor grade single crystal silicon furnace leading supplier. The company has developed major products including 8-12 inch semiconductor grade single crystal silicon furnace, 6-8 inch silicon carbide single crystal furnace, sapphire single crystal furnace and other crystal growth equipment; in 2022, silicon carbide single crystal furnace and semiconductor single crystal silicon furnace accounted for about 65.9% and 29.6%, respectively. The company's semiconductor-grade single crystal silicon furnace has achieved batch production in the process above 28nm, and its main customers include Shanghai Silicon Industry (Shanghai Xinyi), Lion Micro (Jin Ruihong) and Shengong shares; the main customers of silicon carbide single crystal furnace business include San'an Optoelectronics, Tony Electronics and Zhejiang Jingyue.

Silicon carbide single crystal furnace has a significant first-mover advantage, and the domestic market space of silicon carbide single crystal furnace is expected to exceed 2 billion yuan.

1) technological advantages: in 2017, the company launched the research and development of the third generation compound semiconductor silicon carbide single crystal furnace; in 2018, the company's first third generation compound semiconductor silicon carbide single crystal furnace was officially delivered to customers.

The silicon carbide single crystal furnace produced by the company is mainly used in 6-inch silicon carbide single crystal substrate, which has the characteristics of integrated structure design, high precision temperature and pressure control, strong replicability of production process, high stability operation and so on.

The 8-inch silicon carbide crystal equipment developed by the company has broken through the key technology of large-size crystal growth, which can realize the automatic operation of leak detection, furnace washing and crystal growth, the accurate control of flow, temperature and pressure parameters, and the control and separation of axial and radial temperature ladder. In addition, the 8-inch silicon carbide crystal equipment developed by the company has a unique structural design, which facilitates later maintenance and loading and unloading, improves the thermal field life and working efficiency, and further meets the needs of customers to achieve low-cost and high yield crystal growth.

In 2022, the company sold 227 silicon carbide single crystal furnaces. Due to the strong demand for silicon carbide, while silicon is still in the industry adjustment cycle, the company forecasts that silicon carbide single crystal furnaces will still account for a large proportion of the company's main business income in 2023.

2) customer advantage: although the current domestic mainstream specification of silicon carbide is 6 inches, many customers have invested in research and development in 8 inches. Now the company has delivered 8 inch silicon carbide crystal equipment to a number of customers, some customers have achieved certain research and development results, and are constantly optimizing the process.

At present, the domestic downstream silicon carbide manufacturers to achieve mass production application progress and scale leading enterprises are San'an Optoelectronics, Tianyue Advanced, Tianke Heda. The company's silicon carbide single crystal furnace business has covered the main manufacturers involved in substrate manufacturing in the domestic silicon carbide industry chain, and has established a stable cooperative relationship with San'an Optoelectronics, an IDM enterprise with large production and marketing scale and relatively perfect industrial chain layout. By supplying customers with San'an Optoelectronics, the company's silicon carbide single crystal furnace leads the country in the application of large-scale mass production in the field of downstream conductive substrates and silicon carbide power devices, and has achieved advanced product verification to Tianyue, a leading manufacturer of semi-insulating substrates in China. the products have first-mover advantages, technical advantages and competitive advantages.

3) accelerated expansion of domestic silicon carbide production capacity + localization of equipment increases the demand for silicon carbide single crystal furnace, the company's silicon carbide single crystal furnace domestic market space is expected to exceed 2 billion yuan. Under the condition that the silicon carbide market maintains a high demeanor, the double factors of accelerating domestic production capacity expansion and increasing the localization rate of superimposed equipment drive the development of China's silicon carbide crystal growth equipment market. According to Nine Party Capital, according to the incomplete statistics that silicon carbide substrate manufacturers have issued announcements (or news), the total production capacity of silicon carbide substrates to be built is more than 1000 million per year (including 4-5 million overseas and 5-6 million domestic).

According to the conservative calculation, according to the company's prospectus, according to the estimated domestic production capacity of 3.6 million pieces per year, the domestic silicon carbide single crystal furnace market can achieve about 7200-9600 new market scale. Combined with the sales price of the company's products, it is assumed that the unit price range of silicon carbide single crystal furnace is 60-1.1 million yuan (including tax), and the domestic market space of silicon carbide single crystal furnace is about 4.32 billion-10.56 billion yuan.

Assuming that the average market space is 7.44 billion yuan, and according to the company's existing domestic market share of silicon carbide single crystal furnace (27.47% 29.01%), the domestic market space of the company's silicon carbide single crystal furnace is expected to exceed 2 billion yuan.

Investment suggestion

We estimate that in 2025, the company will achieve income of 4.36 yuan, 7.27 billion yuan, and net profit of 0.72 yuan, 1.41 / 205 million yuan, respectively, and the current stock price will be 92 times, 47 times and 33 times of PE in 2023-2025, respectively, with a "buy" rating.

Risk hint

Inventory price decline risk; technology iteration risk; parts rely on third-party supplier manufacturing risk; downstream production expansion is not as expected.