Fuchuang Precision released the third quarterly report of 2023:
In the first three quarters of 2023:1) Realized revenue of 1.39 billion yuan,+37.28% year-on-year; realized net profit attributable to parent of 132 million yuan,-19.15% year-on-year; realized net profit deducted from non-parent of 37 million yuan,-70.18% year-on-year.
2) Gross profit margin 27.09%,-6.2pct year-on-year; parent net profit margin 9.5%,-6.63pct year-on-year; deduction of non-parent net profit margin 2.67%,-9.61pct year-on-year. 3) The expense ratio during the period was 23.53%,+6.37pct year-on-year, and the sales/management/R & D/finance expense ratio was 1.99%, 10.03%, 10.73% and 0.77% respectively, with year-on-year changes of 0.67, 2.07, 2.95 and 0.68pct respectively.
Q3 single quarter of 2023:1) Realized revenue of RMB 561 million yuan, year-on-year +35.37% and month-on-month +15.26%; realized net profit attributable to parent of RMB 36 million yuan, year-on-year-42.13% and month-on-month-35.46%; realized net profit deducted from non-parent of RMB 12 million yuan, year-on-year-76.29% and month-on-month-44.93%. 2) Gross profit margin 26.4%, year-on-year-6.48pct, month-on-month +0.01pct; parent net profit margin 6.47%, year-on-year-8.67pct, month-on-month-5.08pct; deduction of non-parent net profit margin 2.11%, year-on-year-15.87pct, month-on-month-3.9pct. 3) The expense ratio during the period was 23.31%,+6.78pct year-on-year and +1pct month-on-month, and the sales/management/R & D/finance expense ratio was 1.68%, 9.97%, 10.22% and 1.44%, respectively, with year-on-year changes of 0.49, 1.76, 2.35 and 2.19pct and month-on-month changes of-0.01,-0.25,-0.9, and 2.16pct respectively.
The net profit of parent company declined obviously, mainly due to the downward trend of gross profit margin and the increase of expense expenditure. 1) The gross profit margin declined in the first three quarters of 2023, mainly due to the adjustment of product structure: the gross profit margin of the company's module products was relatively low, but the proportion of revenue increased significantly. 2) The company's layout of new production capacity leads to obvious upward expenses: the company distributes production capacity in Nantong, Beijing and other places, reserves talents and equipment and other resources in advance, and spends a lot of expenses. During the first three quarters of 2023, the company's expenses reached RMB 327 million yuan, with a year-on-year increase of 88.25%, among which sales/management/R & D expenses increased by 107.61%/72.97%/89.25% respectively. In addition, the financial expenses in Q3 increased greatly, increasing by 11.59 million yuan to 8.1 million yuan compared with-3.49 million yuan in Q2, mainly due to the increase of long-term borrowings of 270 million yuan in Q3, resulting in a large increase in interest expenses.
The company is a semiconductor equipment precision parts leader. Founded in 2008, Fuchuang Precision was successfully listed on Kechuang Board of Shanghai Stock Exchange in October 2022. Its products are semiconductor equipment, pan-semiconductor equipment and precision parts in other fields, including process parts, structural parts, module products and gas pipelines. The company is a leading enterprise in precision parts of semiconductor equipment in China, and is also one of the few precision parts manufacturers in the world that can be mass-produced for semiconductor equipment with 7 nm process technology.
Semiconductor equipment components have interdisciplinary high barrier attributes that determine critical performance of semiconductor equipment. Precision parts of semiconductor equipment have the characteristics of high precision and high cleanliness. The production process involves many fields and disciplines such as precision machinery manufacturing and engineering materials, which is the direct guarantee of the core technology of semiconductor equipment.
In terms of market space, sales of precision parts account for about 25%-35% of the total sales of semiconductor equipment.
Taking 25% of semiconductor sales as the calculation caliber, combined with Semi, semiconductor component sales will reach US $35 billion by 2030.
Excellent technical level, covering international/domestic first-line semiconductor equipment manufacturers. In terms of breadth, there are seven categories of semiconductor components, so most of them focus on one process or specific precision components products, and the company covers four categories of products, accounting for 50%-60% of the total value of semiconductor components, which is a rare multi-process precision components supplier. In terms of depth, the company's customers cover 4 of the top 10 semiconductor equipment vendors in the world and 9 of the top 10 semiconductor equipment vendors in China.
A number of domestic and foreign production base projects will be put into production/production soon, and the growth space will continue to be opened. Domestic: Public The company has set up factories in Beijing and Nantong, among which Nantong factory has been put into operation/reached production time of 2023/2025 respectively, with output value reaching RMB 2 billion yuan; abroad: the company has set up factories in Singapore and the United States. After the production base reaches production capacity, the company's production capacity and growth space will continue to open.
Profit forecast and valuation: We estimate that the operating income of the company in 23-25 years will be 20.33/30.43/42.30 billion yuan, yoy+31.65%, 49.67% and 38.99%, and the net profit attributable to the parent company will be 1.99/3.07/4.46 million yuan, yoy-18.92%,+54.09%, 45. 41%, and the corresponding PE will be 82/53/37X. In the short and medium term, the company is in the production capacity construction period, and the adjustment of product structure will indeed suppress the growth of profit end to a certain extent. However, in the long run, the production capacity is the key to construct the core barrier. We believe that with the continuous release of production capacity, the scale effect will dilute the expenses and the net interest rate will be revised upward. We are optimistic about the long-term development of the company and give it a "recommended" rating.
Risk warning: management risk brought by scale growth, risk of relatively insufficient talent reserve, risk of R & D failing to keep up with process evolution and semiconductor equipment update iteration