Event: Changchuan Science and Technology released its third quarterly report in 2023. In the first three quarters of 2023, the company achieved revenue of 1.209 billion yuan, down 31.06% from the same period last year; net profit from home was 1.3257 million yuan, down 99.59% from the same period last year; and net profit from non-return was-107 million yuan, down 140.83% from the same period last year.
Multiple factors put pressure on Q3 performance in 2023: as the semiconductor cycle is not yet completely off the bottom, major market economies are still slowly recovering and overseas technology restrictions are escalating, the market demand for the company's products is still weak. The company's contract debt at the end of Q3 in 2023 was 14 million yuan, an increase of 186.30% compared with the beginning of the period, and the amount of inventory also increased, reflecting an improvement in downstream demand. If the industry boom picks up in the future, the performance of Changchuan Technology is expected to improve.
High performance-to-price ratio and good reputation contribute to the recovery of the company's business growth: Changchuan Technology has mastered the core technology of integrated circuit testing equipment, and the company's testing machine and sorting machine have reached the domestic leading level and close to the foreign advanced level in the core performance indicators. At the same time, the price of the company's products is lower than that of similar foreign products, with a cost-effective advantage, with a strong competitiveness. At present, the company's integrated circuit testing machines and sorting machines and other products have achieved a good reputation among high-quality customers, and the market share of the products is expected to increase in the future.
Focus on integrated circuit testing equipment, strategic layout and coordinated development: the company continues to expand the product line, focusing on the development of probe table, high-end testing machine products, three-temperature sorting machine, AOI optical testing equipment and other related closed testing equipment. The company acquired STI in 2019, and its 2D/3D high-precision optical testing technology (AOI) can provide strong support for the company to enter the front optical performance testing process. In 2022, the company passed the approval of issuing shares to purchase assets to acquire Changyi Technology (Exis, Malaysia). With EXIS's rich experience in the field of turret separators, the company is expected to achieve a breakthrough in the field of turret separators.
Investment suggestion: considering the impact of overseas restrictions on the company's customers and the company's on-hand orders, we estimate that the company's revenue from 2023 to 2025 will be 2.285x3460,43.379 billion, and the net profit returned to the parent will be 0.44pm 518,921 million respectively, corresponding to a PE of 537.97x45.59pm 25.62 times, maintaining the "overweight" rating.
Risk tips: semiconductor market boom downward superimposed overseas supply risks; domestic equipment procurement slowed down; high-end product research and development progress is not as expected; industry competition intensified.