The interim report was in line with the forecast, with Q2's revenue increasing by 54% in a single quarter.
1) 23H1:829 million yuan (forecast 82-84 million yuan), +39%, net profit attributable to mother of 96 million yuan (forecast 0.9 to 100 million yuan), year-on-year ratio -5%, less than 225 million yuan (forecast 0.23 to 27 million yuan), non-expended profit and loss of 70 million yuan, including 50 million yuan in government subsidies and 20 million in investment income. The gross profit margin was 28%, -6 pcts, the net interest rate was 12%, and the previous year was -5 pcts. There was a year-on-year decline in profits, mainly due to factories in Nantong, Beijing, etc. reserving talents and equipment in advance. Labor costs increased by about 24 million yuan in January-June, depreciation and amortization expenses increased by about 11 million yuan, increased R&D expenses, changes in product structure, and increased the share of module revenue with low gross margin. After deducting increased labor costs and depreciation and amortization expenses of 35 million yuan, 23H1's net profit was 131 million yuan, +31% year-on-year. R&D expenses were 92 million yuan, +99% year on year, R&D cost rate 11%, +3 pcts year on year.
2) 23Q2: Revenue was 487 million yuan, +54% year on month, +43% month on month; net profit returned to the mother was 56 million yuan, -7% year on year, +44% month on month, less than 102 million yuan, -50% year on month, gross profit margin 26%, year on year -8 pcts, -3 pcts month on month, net interest rate 12%, -7 pcts, +1 pcts month on month.
The module and domestic market share have increased markedly, and we continue to pay attention to the domestic substitution process.
23H1 process components/structural components/module products/gas pipeline revenue of 1.95/2.03/3.45/73 million yuan, accounting for 24%/25%/42%/9%, revenue change +11%/+2%/+189%/-23% year on year. Modules grew rapidly and share increased significantly. By region, mainland/regions other than mainland China contributed 526/291 million yuan respectively, +73%/+2%. 22H1 accounted for 52%, 23H1's share of revenue increased significantly and continued to rise to 64%. Benefit from domestically produced alternatives.
A leader in semiconductor components in mainland China, with complete processes and rich products.
The company mainly produces metal parts for semiconductor equipment, is famous for aluminum alloy materials, and has already entered the 7nm process. Currently, more than 3,000 types of first products are delivered every year, and more than 2,000 types of first products have been mass-produced. The completeness of the process and variety of products are rare in the global industry. It is already a strategic supplier of leading global equipment, and has also been introduced into mainstream domestic equipment manufacturers. It can not only enjoy the global semiconductor market, but also deeply benefit from the domestic substitution dividend.
The global market for products is 16 billion US dollars, and there is plenty of room for market share growth.
The mainland is the largest equipment market in the world. The localization rate of parts is extremely low. Domestic equipment manufacturers mainly purchase from Japan, the United States, etc. The total global market size of the company's four categories of products is about 16 billion US dollars, with a global share of 1%. Currently, it is actively laying out production capacity, and there is broad scope for development.
Investment suggestions: The company is a semiconductor component leader in mainland China. It has complete processes and diverse products. It is recognized by equipment leaders at home and abroad, and the company is scarce. The mainland component market is large and self-sufficiency is low. Currently, the localization process has accelerated markedly. With the release of the company's new production capacity, the company is expected to fully benefit from domestic substitution opportunities, and at the same time enjoy the development dividends of the global semiconductor industry. The company has excellent growth. It is estimated that revenue for 23/24/25 was 20/28/4 billion yuan, and net profit to parent was 26/3.6/530 million yuan, corresponding to 66/48/32 times PE, maintaining the “buy” rating.
Risk warning events: production capacity release falls short of expectations, downstream demand falls short of expectations, etc.