Events:
The company released its third quarter 2023 results report. In the first three quarters of 2023, the company achieved operating income of 2.199 billion yuan, an increase of 14.19% over the same period last year; net profit of 196 million yuan, up 20.54% over the same period last year; deducting 151 million yuan of non-net profit, down 18.70% from the same period last year; and basic earnings per share of 0.56 yuan per share.
Revenue is under pressure in a single quarter, and profit has improved from the previous quarter.
In a single quarter, the revenue side is under pressure, but the cost side is well controlled and profitability has improved. 23Q3 achieved operating income of 719 million yuan, down 10.75% from the same period last year; net profit from home was 87 million yuan, up 7.40% from the same period last year; gross profit margin and net profit margin were 35.11% and 11.17% respectively, year-on-year + 0.48pct, 1.11pct, month-on-month-1.01pct and + 7.46pct. 23Q3 company sales expense rate, R & D expense rate decreased significantly, month-on-month decline in 2.81pct, 5.42pct.
The expansion of wet process equipment is smooth, and the product lines of some leading domestic companies applying wet process equipment to mature processes have been expanded in an orderly manner, and the production line permeability of some logical users and third-generation semiconductor users continues to improve. At present, the wet process equipment has been fully covered at 28 nm nodes, and there are orders for all process machines, and some process orders have been obtained at more advanced process nodes.
The high-end product lines used in advanced processes are delayed due to the progress of user expansion, but in machines such as high-temperature sulfuric acid, FIN ETCH and monophosphoric acid, which are still monopolized by international manufacturers, the company is ahead of the domestic delivery and verification progress.
Earnings forecast, valuation and rating
Taking into account the postponement of fab expansion in the semiconductor cycle, we estimate that the company's operating income in 2023-2025 will be 35.48amp 44.84 billion yuan (the original value for 23 years is RMB 3.862 billion), and the year-on-year growth rate will be 16.35% 26.39% 26.43% respectively. The net profit of home ownership is 672 million yuan (the original value for 24 years is 495,629 million yuan), and the year-on-year growth rate is 14.20%, 46.65%, 42.05%, respectively, and the CAGR of 3 years is 33.50%, respectively. In view of the gradual increase of the company's semiconductor cleaning equipment, with reference to the comparable company's valuation, we give the company 30 times PE in 2024, with a target price of 36.70 yuan, maintaining a "buy" rating.
Risk tips: downstream fab plant production expansion is not as expected, cleaning equipment verification is not as expected, parts procurement risk.