Event: on October 26, the company released its third quarterly report for 2023. In the first three quarters of 2023, revenue reached 1.129 billion yuan, down 19.51% from the same period last year; net profit from home was 122 million yuan, down 34.28% from the same period last year; and net profit from non-return was 113 million yuan, down 37.19% from the same period last year.
Operating results are under pressure from the same period last year, and month-on-month improvement is expected to continue. 23Q3, the company realized revenue of 389 million yuan, down 25.14% from the same period last year, up 1.83% from the previous year; realized net profit of 47 million yuan from the same period last year, down 30.77% from the same period last year, and increased by 34.28% from the previous year; realized net profit of 44 million yuan from the same period last year, down 34.05% from the same period last year, and increased by 46.67% The main reasons for the year-on-year changes in the company's operating results in the first three quarters of this year are as follows: 1) the rare gas is affected by supply in 2022, the increase in the unit price of materials leads to high sales revenue, and the unit price of rare gases returns to the normal level in 2023. Sales revenue fell 2) since the second half of 2022, the supply of chips exceeds demand, the semiconductor industry is affected by the supply and demand of the industry itself and the new product cycle, the downstream demand is structurally divided, the growth rate of the consumer electronics industry slows down, and semiconductor sales gradually decline.
Looking to the future, with the pick-up rate of downstream wafer factories, the performance improvement is expected to continue.
The gross profit margin has improved significantly, and positive progress has been made in germanane and ethylsilane projects. Q3 gross profit margin is 32.10%, year-on-year increase of 5.01pct, month-on-month increase of 3.85pct. The company optimizes gross profit by extending the industrial chain, setting up overseas points (reducing the proportion of overseas export intermediaries), optimizing production lines, increasing production capacity and strengthening the research and development of high value-added products, and some of the products exported overseas show competitive advantages. in the future, the company will continue to consolidate its self-research capability in the optimization of gross profit margin. At the end of last year, the company's germanium products passed the certification of the 5nm process production line of South Korea's largest memory enterprise, and orders have been generated. High purity germanium alkane is mainly used in advanced process technology, and there is no demand for its products at home. The company's germanium alkane products are mainly exported overseas. The production line installation of the ethylsilane project has been completed. At present, in the small-scale test stage, the test products have been certified by some downstream customers and are in a state of certification.
Build a semiconductor gas R & D and production center to localize Teqi. On October 26, the company announced that it planned to sign the "Project Investment Agreement of Watt Semiconductor Materials Research and Development headquarters" with the people's Government of Triangle Town, Zhongshan City, Guangdong Province, to build a semiconductor gas R & D and production center in Triangle Town, Zhongshan City, Guangdong Province. for ultra-clean and high-purity special gas production, relieve part of the production capacity pressure of the company's Foshan headquarters, lay a solid foundation for the company's future development in Guangdong, with a total investment of 800 million yuan. This project is in line with the company's strategic direction of focusing on special gas development, in line with the national policy and the company's strategic development needs, is conducive to the full use of resources, enhance the company's future business capacity, and contribute to the long-term development of the company.
Investment suggestion: taking into account the company's active expansion of new products, it is estimated that the company's 2023-2025 net return profit will be RMB 2.65 million respectively, corresponding to the current price of PB for 2023-2025 is 4.3 times 3.9pm, PE is 43-30-22 times, we are optimistic about the company's competitiveness in the field of specialty gases and business growth, and maintain the "recommended" rating.
Risk tips: downstream demand is lower than expected; market competition intensifies; raw material prices rise.