Event: the company disclosed its third quarterly report in 2023.
Main points of investment
Q3 revenue grew steadily compared with the same period last year, and domestic replacement of semiconductor equipment parts continued to achieve a total operating income of 1.39 billion yuan in the first three quarters of 2023, an increase of 37% over the same period last year. The net profit returned to the home was 132 million yuan, down 19% from the same period last year, deducting 37 million yuan from the same period last year and down 70% from the same period last year. The single Q3 company achieved a total operating income of 560 million yuan, an increase of 35% over the same period last year, deducting 36 million yuan in non-return net profit, down 42% from the same period last year. The company's revenue growth rate is steady, mainly due to domestic customer expansion, domestic replacement of semiconductor equipment parts, short-term profit growth pressure, (1) Nantong and Beijing production base construction reserve of talents and equipment, labor costs, depreciation and amortization increased.
(2) the proportion of income of module products with low gross profit margin increases. (3) the company increased its R & D investment, and R & D expenses increased by 89% compared with the same period last year. In the future, with the recovery of downstream demand, the company's production capacity is released, and profit growth is expected to be repaired.
Under the influence of changes in business structure and production expansion, the profitability of the company has declined periodically under short-term pressure: in the first three quarters of 2023, the company's sales gross and net profit rates were 27.1% and 9.5% respectively, down 6.2pct and 5.7pct respectively from the same period last year. Single Q3 sales gross profit margin 26.4%, same / month-on-month change-6.5/0.0pct, net sales margin 6.3%, same / month-on-month change 7.3/5.8pct. The expense rate has increased: in the first three quarters of 2023, the expense rate during the company period was 23.5%, an increase of 6.4pct over the same period last year, of which the sales / management / R & D / financial expense rate was 2.0%, 10.7% and 0.8%, respectively, which increased 0.67/2.07/2.95/0.67pct over the same period last year. The decline in corporate profitability is mainly affected by the increase in the proportion of domestic business, the proportion of low gross margin module products, the unreleased scale effect of new production capacity and the provision of equity incentives. In the future, with the production base put into use, the efficiency of operation and management will be improved, and the profitability is expected to be repaired on a month-to-month basis.
Semiconductor equipment parts leader, forward-looking expansion to open the growth space company is the highest purity, largest scale, the most comprehensive product range of semiconductor parts suppliers, profoundly benefiting from the tide of localization of semiconductor equipment and components, has entered the domestic and foreign mainstream semiconductor leading equipment supplier supply chain, strong research and development strength, high quality customer resources. In China, the company plans to build Shenyang, Nantong, Beijing three major production bases, forward-looking layout of production capacity. Among them, the Nantong plant is in the stage of equipment introduction and commissioning, with an annual output value of about 2 billion yuan after delivery in 2025, while the Beijing plant is expected to reach production by 2027, with an output value of about 2 billion yuan. Overseas, the company issued an announcement on August 5, 2023 to establish a wholly-owned subsidiary in Singapore to enhance the overseas market layout, which is expected to reduce the impact of geopolitical factors on the company's overseas business. Under the trend of domestic substitution in the semiconductor industry chain, the company is expected to maintain high growth with the expansion of production capacity and the continuous promotion of channel construction.
Profit forecast and investment rating: taking into account the uncertainty of the expense side, we adjust the 2023-2025 homing net profit forecast to 2.24,000,000 yuan (original value 3.0,4.3yuan) / 5.86billion yuan (original value 6.5m). The current market capitalization corresponds to PE times as much as 73-38-28, maintaining the "overweight" rating.
Risk hints: industry cycle fluctuation risk, raw material price fluctuation, geopolitical conflict and so on.