Incidents:
The company released its semi-annual report for 2023. In the first half of 2023, it achieved operating income of 652 million yuan, an increase of 15% over the previous year; net profit of 76.9939 million yuan, an increase of 21.23% over the previous year; net profit of non-return net profit of 674.85 billion yuan, an increase of 9.6% over the previous year.
Performance continues to grow steadily, and R&D investment continues to be strengthened:
According to the company's semi-annual report, the increase in net profit for the first half of 2023 was mainly due to the company's active market development. The scale of business revenue increased over the previous year, and overall sales performance increased.
In the first half of 2023, the company's revenue in the field of clean room air purification was 499 million yuan, an increase of 27.5% over the previous year, and its main business achieved steady growth. The company managed efficiently, continued to reduce costs and increase efficiency, and achieved a net sales interest rate increase of 1.68 pct over the full year of 2022. In addition, the company continued to increase R&D investment in filter material modification, filter production, finished product manufacturing, energy efficiency, etc. The R&D expenses in the first half of the year were 31.0286 million yuan, an increase of 26.17% over the previous year. As of June 2023, the number of R&D personnel had reached 19.64%.
With the semiconductor field as the core, we adhere to the development strategy of “diversification, globalization and sustainability”:
The company focuses on semiconductor ultra-clean plants and is the leader in domestic fan filter units and filter equipment. According to the semi-annual report, the company ranks first in the industry in the domestic semiconductor clean room field, with a market share of about 30%. Relying on its advantages in the semiconductor clean room field, the company has further extended air cleaning technology and actively expanded downstream application fields such as GMP biopharmaceuticals, photovoltaics, and new energy. At the same time, with its products having the advantage of being cost-effective internationally, the company has accelerated its expansion into overseas markets such as Southeast Asia, and has entered the supply chain of many internationally renowned semiconductor chip and new energy photovoltaic manufacturers. Relying on overseas production bases and overseas sales in recent years, the scale of the company's overseas revenue has grown rapidly, and the company's overseas revenue CAGR has been close to 50% in the past three years. In 2022, the gross margin of the company's overseas business revenue was 30.34%, higher than domestic business revenue. The increase in overseas share provided strong support for the company's performance growth. Furthermore, according to the public investor relations activity record, the company's filter products are consumables and need to be replaced regularly. The stock replacement business has a large market space, strong customer stickiness, and high sustainability in performance contribution. With the steady increase in the share of the company's filter product replacement revenue, it is expected to provide strong support for the sustainability of performance growth.
Domestic and foreign production capacity restrictions are about to be broken through to ensure subsequent performance growth:
By the end of 2021, the company's fan filter unit production capacity was 253,500 units, and the total production capacity of filter products was 2.249,000 pieces. The capacity utilization rate was higher than 100%. It is already at full capacity, and needs to be produced through external cooperation to a certain extent. In order to solve the bottleneck of insufficient production capacity, according to the prospectus, the company's core fundraising project is the Nanjing production plant phase II capacity expansion project. After production is put into operation, 240,000 fan filter units and 1.92 million filter products will be added, respectively, bringing about a significant increase in production capacity. According to the company's public investor relations activity record, at home, the second phase of the Nanjing plant expansion project began in July 2022 and is expected to be put into operation in the second half of 2023. It is expected that production capacity after full production will reach 1.5 times the current Nanjing factory's production capacity; overseas, the company's Malaysian factory purchased two new plants by the end of 2022, and its production capacity is expected to increase steadily from 50 million yuan to 150 million yuan in the third and fourth quarters of this year. Domestic and foreign production capacity expansion is imminent, which guarantees the continued growth of subsequent company orders.
Investment advice:
We expect the company's revenue from 2023 to 2025 to be 1,486 billion yuan, 1,883 billion yuan, and 2.116 billion yuan respectively, and net profit of 160 million yuan, 206 million yuan, and 230 million yuan respectively. It maintains the investment rating of Buy-A, and has a target price of 38.25 yuan for 6 months.
Risk warning:
The risk of increased competition in the industry; the risk of fluctuations in raw material prices; the risk that downstream demand falls short of expectations; the risk that accounts receivable turnover and inventory turnover are low; and the risk that the construction progress of fund-raising projects falls short of expectations.