occurrences

The company released its semi-annual report for 2023 on August 17: the company achieved revenue of 764 million yuan for the first half of 2023, +129.7%; realized net profit of 63 million yuan, +93.9%; realized net profit of 58 million yuan after deducting non-return net profit of 58 million yuan, +121.17%, and gross margin of 21.28%. According to calculations, in Q2 2023, the company achieved revenue of 433 million yuan, +124.72% year on month, +30.83% month on month, achieved net profit of 32 million yuan, +57.97% year on year, and +2.41% month on month, achieved net profit of 31 million yuan after deducting non-return net profit of 31 million yuan, +96.35% year on year, and +13.73% month on month.

Key points of investment

Orders are full, overall production capacity has increased, and performance is impressive

In the first half of 2023, the company received full orders, strong downstream demand, and increased overall production capacity. Under the tight supply of some raw materials and rising prices, the company improved production efficiency and product yield through technological innovation, process improvement and fine management. By strengthening upstream and downstream collaboration and deepening strategic cooperation in the industrial chain, core competitiveness continues to improve. In the first half of the year, the company achieved total operating income of 764 million yuan, +129.7% year-on-year, and net profit of 63 million yuan, or +93.9% year-on-year.

Recently, the company also signed a capacity guarantee agreement with customer A, which stipulates that during the period from September 2023 to June 2026, the company will supply customer A every month according to the actual production capacity of the first month of each fiscal year, and no more than 200,000 units/month. Subsequent adjustments can be made on a routine basis with mutual agreement. The signing of the contract fully reflects the company's technical strength and current status of full orders, which is conducive to the development of the company's main business. If the contract is successfully executed, it is expected to have a positive impact on the company's future performance and enhance the company's continuous profitability and core competitiveness.

Increase investment in R&D and actively develop new products and technologies

R&D expenses in the first half of 2023 were 504.844 million yuan, +117.24% over the same period. The main reason for the increase in R&D expenses was the increase in R&D personnel remuneration and direct investment in R&D projects. The company carried out technology and product research and development according to the annual R&D plan and market demand, and deployed advanced equipment according to project requirements, rationally distributed R&D teams, enhanced external cooperation, made full use of R&D resources, raised the level of independent innovation and R&D, and consolidated its leading position. The main R&D results are as follows: ① The 400A/650V three-level customized module for photovoltaics has been developed smoothly, and mass delivery has begun. Currently, production capacity is stable and the terminal performance is good; ② The automotive 800A/750V double-sided cooling module has been developed smoothly. Through relevant automotive reliability tests and system tests, it has begun to be delivered and used in small quantities; ③ the smooth development of the automotive 750V 12-inch chip and the corresponding automotive modules have been rapidly upgraded; ④ 12 inch 1700V high performance reflow tube and 1700V IGBT chip have been developed and verified.

Focus on IGBT and FRED, self-developed products have a leading position

Since its establishment, the company has focused on the R&D, manufacturing and sales of power semiconductor chips, single tubes, and modules, mainly IGBTs and FRED, to provide customers with power semiconductor solutions. IGBT and FRED chips are the core of single tubes and modules, and the company has relevant advanced intellectual property rights. The single tube uses self-developed chips, and module products are mainly self-developed chips, supplemented by purchased chips. As core devices, IGBT and FRED are widely used in the fields of electricity, automation, and power transmission. Currently, the company's products include more than 80 types of IGBTs, FRED, MOSFET chips and single tubes, and more than 270 types of IGBTs, FRED, MOSFETs, rectifier diodes and thyristor modules. The products are widely used in industrial control, new energy generation, electric vehicles and other fields. The company's products are at the advanced level of the industry in terms of performance and process technology.

Profit forecasting

The company's revenue for 2023-2025 is estimated to be 15.33, 24.65, and 3.481 billion yuan, respectively, EPS of 0.99, 1.70, and 2.59 yuan respectively, and the current stock price corresponding to PE 52, 30, and 20 times, respectively. The company's performance in the first half of 2023 was excellent. The company's IGBT and FRED-centered processes have a leading position in the industry, and investment in R&D expenses continues to increase. They are optimistic about the company's long-term development, so it maintains a “buy” investment rating.

Risk warning

Technological upgrades and product iteration risks, increased market competition, risk of depreciation and impairment of fixed assets, risk of dependency on important suppliers, risk of R&D progress falling short of expectations.