The company's 23H1 performance was in line with expectations, and profits grew steadily. In 2023, H1 achieved revenue of 436 million yuan, down 25.30% year on year; realized net profit of 52 million yuan, up 33.57% year on year; overall gross margin was 22.54%, up 5.31 pct year on year; Q2 achieved revenue of 244 million yuan, up 26.47% from 23Q1, down 20.94% year on year; achieved net profit of 222 million yuan, up 4.87% from 23Q1, up 24.72% year on year; overall gross margin was 21.36%, ring It fell 2.67 pct from 23Q1 and increased 5.73 pct from the previous year.
Microelectronic welding materials are the core support of performance, and fund-raising projects expand production capacity. In '23, H1's microelectronics welding materials business achieved revenue of 365 million yuan, down 28.09% year on year; gross margin was 16.06%, up 5.39 pct year on year.
The company's microelectronics auxiliary welding materials business achieved revenue of 57 million yuan, a year-on-year decrease of 4.54%; gross margin was 50.34%, an increase of 5.11 pct over the previous year. The company's performance contribution mainly comes from the microelectronic welding materials business represented by solder paste, solder bars, and solder wire. The gross margin increased year-on-year. The IPO fund-raising project will add 1,444 tons and 900 tons to 2,604 tons and 1,612 tons of solder wire after delivery, respectively, which is expected to increase performance.
Profit improved year over year, and semiconductor+PV increased future space. On the profit side, due to the price of the raw material tin metal, the company's gross margin in Q2 fell 2.67 pct compared to Q1. But thanks to the company's “raw materials+fixed processing fees”
In the pricing model, product unit profit was not affected by material prices. At the same time, the increase in sales volume drove the increase in net profit. 23H1's net profit increased by 33.57% year-on-year. In terms of revenue, according to the Interim Report, the price of tin dropped by nearly 33.66%, from an average price of 313,300 yuan/ton in the same period last year to 207,800 yuan/ton. Due to the transmission of tin prices, the unit sales price of solder paste, solder bars, and solder wire also declined. The impact was greater than the increase in the company's product sales volume, which led to a year-on-year decline in the company's revenue. However, as tin prices stabilized, the company achieved a positive year-on-year increase in revenue in June. In terms of market conditions, the smart home appliance and LED industries are showing signs of restoration, and the photovoltaic industry and the new energy sector are clearly growing. The company continues to expand the photovoltaic and semiconductor fields, improve its product matrix, and has established cooperation with Jingke Technology and Tianhe Solar in the photovoltaics field; the company began entering the semiconductor industry in '21, and customer verification and technical research have progressed. As the popularity of semiconductors and photovoltaics increases, the use of microelectronic welding materials and auxiliary welding materials will increase steadily, enhancing the company's future space.
Profit forecast: As downstream consumer electronics and home appliances are expected to recover and upstream tin prices fall, we expect the company's profitability to improve in 23 years, and return net profit will continue to grow. The company's revenue for 2023-2025 is expected to be 11.36/13.21/1,571 billion yuan, with a year-on-year growth rate of 8.7%/16.3%/18.9%, and a net profit of 1.25/1.59/208 million yuan, with a year-on-year growth rate of 51.4%/26.9%/31.1%, respectively. The corresponding EPS was 2.14/2.71/3.55 yuan/share, and the corresponding PE was 26/21/16 times, respectively, maintaining the “buy” rating.
Risk warning: demand falls short of expectations; raw materials fluctuate greatly; project progress falls short of expectations.