Guang Liwei: a leading enterprise in the field of improving the rate of finished products in China. Founded in 2003, Guangliwei is a leading supplier of integrated circuit EDA software and wafer-level electrical testing equipment in China, focusing on chip yield improvement and rapid monitoring technology for electrical testing. Focusing on the field of IC yield improvement, the company has honed and studied for many years. Relying on software tool authorization, software technology development and testing machines and accessories, the company provides wafer-level EDA software, WAT test equipment and accessories, as well as full-process solutions combined with chip yield improvement technology. At present, the company's advanced solutions have been successfully applied to major Foundry manufacturers in Asia, such as Huahong Group, Samsung Electronics, Yuexin Semiconductor, Hefei Jinghe, Changxin Storage, as well as some well-known Fabless manufacturers. In the first half of 2023, the company's revenue and return net profit were 127 million yuan and 23 million yuan respectively, a year-on-year growth rate of 63.91% and 3903.60% respectively, maintaining a steady and rapid growth trend.

EDA domestic replacement space is broad, a series of products to get through a full set of programs. According to Kbv Research and Grand Viewer, the global and Chinese EDA market space is expected to reach US $117.8 and US $1.3 billion respectively in 2023, and CAGR growth is expected to reach 7.6% and 11.8% respectively from 2022 to 2027. At present, the domestic EDA market is still mainly occupied by overseas leading manufacturers Synopsys, Cadence and Siemens EDA. Guangli micro yield control EDA software has a full range of categories, and further launched a data analysis platform, combined with AI technology to achieve higher precision data analysis. In the first half of 2023, the company launched CMP EXPLORER, a chemical mechanical polishing process modeling tool, which extends its capabilities to the field of manufacturability design software DFM, further complements the capability of EDA software for yield analysis, consolidates its leading position in the field of yield control, and is expected to continuously increase market share with the tide of EDA localization.

WAT products are updated iteratively, and software and hardware work together to build competitive advantage. According to SEMI, the market space of semiconductor test equipment in China will be US $2.517 billion in 2023, and the growth rate of CAGR in 2016-2023 will reach 23.75%. At present, the market of semiconductor test equipment is still dominated by overseas leaders. Guangliwei traditional T4100S series is mainly aimed at the demand of 12-inch wafers and has been recognized by many customers. at the same time, the company launched a new generation of T4000 models in the first half of 2023, mainly aimed at 8-inch wafer production lines, which can meet the testing needs of LOGIC, CIS, DRAM, SRAM, FLASH, BCD and other products, and expand the WLR function on the basis of T4000. The follow-up company WAT testing equipment is expected to continue to increase domestic and foreign market share, cooperate with software to build stronger customer stickiness.

Investment suggestion: we expect Guangliwei 2023 / 2024 EDA 2025 net profit to be 2.02Compact 313Compact 487 million yuan respectively, corresponding to PE is 77-50-32 times, and considering the company's competitiveness in the field of domestic wafer-level EDA tools and WAT testing machines, is expected to benefit from integrated EDA tools domestic substitution and domestic wafer production line yield increase dividend, while the new T4000 further expand the market space. Cover for the first time and give a "recommended" rating.

Risk hints: the risk that the progress of technology development is not as expected; the risk of increased competition in the industry; the risk of lower-than-expected recovery of downstream demand.