Successfully completed the business strategy transformation and established itself in the global MEMS foundry industry. In recent years, the company has gradually divested its original avionics and navigation business, and successfully transformed into a leading semiconductor manufacturing enterprise with MEMS specialty processes as the core in 22Q2, providing customers with one-stop services from MEMS process development, wafer manufacturing to package testing. The company's business covers the world, and has many pilot platforms and mass production plants at home and abroad. Customers include internationally renowned lithography machines, DNA/RNA sequencers, infrared thermal imaging, computer networks and systems, metaverse, silicon photons, AI computing, ICT, new medical equipment giants, and high-quality enterprises in various industry segments. 23H1 achieved total revenue of 397 million yuan, +5.16% YoY, of which MEMS wafer manufacturing revenue was 232 million yuan (58%), +24.53% YoY, and MEMS process development revenue was 129 million yuan (33%), -24.68% YoY; due to fluctuations in downstream demand and Beijing FAB3's production capacity climbing stage in the early stages of operation, KIMU's net profit was -27.44 million yuan.
Sweden's Silex FAB1 & FAB2 is positioned as a pilot+small-batch production line, and the acquisition of a semiconductor park is driving the expansion of production.
According to statistics from Yole Development quoted in the 23 annual report, since 2012, the company's wholly-owned subsidiary, Sweden Silex, has been in the top five in the global MEMS foundry revenue ranking and ranked first in the global MEMS foundry revenue ranking and ranked first in the global MEMS foundry rankings in 2019-2022. Silex has two 8-inch production lines, FAB1 & FAB2, with a total production capacity of 80,000 pieces/year up to 23H1. Due to business expansion needs, Silex is actively promoting production expansion through the acquisition of semiconductor industrial parks and upgrading existing production lines, laying a solid foundation for subsequent acceptance of more process development and wafer manufacturing orders and continuous improvement of production line operation efficiency.
BAW filters and lidar MEMS galvanometers were mass-produced, and orders for FAB3 continued to be released. Beijing FAB3 is positioned as a large-scale mass production line, with a current monthly production capacity of 10,000 pieces (planned production capacity of 30,000 pieces). Up to now, it has achieved mass production of silicon microphones, e-cigarette switches, BAW filters, and lidar microscopes, and is making every effort to promote risk trial production and mass production of MEMS sensor devices such as inertial IMUs, silicon photons, microfluidic control (including gene sequencing), gas, pressure, temperature and humidity, and oscillators. Among them, the 8-inch BAW filter joint production line jointly built by the company and Wuhan Minsheng was completed at the end of the 22nd. Currently, it has achieved large-scale mass production of various BAW filters (including FBAR filters). The initial production capacity is 2000 pieces/month, and can be expanded to 10,000 pieces/month later. The company announced in July 2023 that it had signed a long-term agreement with a customer, involving 12 different types of BAW filters and their derivatives, and the agreement amount was not less than 100 million yuan.
Profit forecasting and valuation. We expect the company's revenue for 2023-2025 to be 1,044/14.47/1,861 million yuan respectively, net profit at the parent level of 0.35/1.12/212 million yuan, and the corresponding EPS of 0.05/0.15/0.30 yuan.
Considering that the company is in the foundry industry with heavy capital investment, we used the PB valuation method to give a valuation of 3.8-4.3X PB in 2023. We believe that the reasonable market value of the company is 194.24-21.98 billion yuan, and the corresponding reasonable value range is 26.48-29.97 yuan/share, covering the “superior to market” rating for the first time.
Risk warning. Downstream demand has recovered less than expected, market development has fallen short of expectations, orders from major customers have been delayed, etc.