MayAir Technology released its report for the third quarter of 2023: In the first three quarters of 2023, the company achieved revenue of 1,072 billion yuan, an increase of 27.89% over the previous year; net profit of 129 million yuan, an increase of 49.97% over the previous year. In the Q3 quarter of 2023, the company achieved revenue of 420 million yuan, an increase of 9.45% over the previous month; net profit was 52 million yuan, an increase of 19.72% over the previous month.
Key points of investment
Performance in the first three quarters increased steadily, and gross margin is expected to continue to rise in the first three quarters of this year. The company actively addressed the challenges of domestic and foreign markets and industries, continued technological innovation, and market development, and achieved operating income of 1,072 billion yuan, an increase of 27.89% over the previous year. At the same time, the company managed efficiently, continued to reduce costs and increase efficiency, and achieved net profit attributable to shareholders of listed companies of 129 million yuan, an increase of 49.97% over the previous year. In the 2023Q3 quarter, the company's gross margin increased by 2.98 pct month-on-month. By business, the gross margin of consumables is expected to reach 30%-40%, and the gross margin on the equipment side is roughly 15%-20%.
In the long run, the proportion of high-margin consumables products continues to increase, and the share of overseas business, which is compounded by an upward trend in gross profit, continues to rise. Overall gross profit will show an upward trend.
The driving force for consumables is sufficient, and the release of production capacity at home and abroad can be expected
The company's consumables products are resilient in demand and are expected to become a long-term driving force supporting performance. According to data for the third quarter of 2023, the company's replacement consumables revenue accounts for about 28% of total revenue, and there is room for further improvement and expansion in the future. Moreover, when replacement consumables account for more than 50% of revenue, the impact of cyclical fluctuations in the downstream industry or fluctuations in the acceptance cycle of very large projects in a single downstream industry on the consolidated reporting level will be relatively limited. Benefiting from the increase in consumables replacement volume and the continuous increase in overseas orders, the company is actively expanding production capacity. Currently, the company's new domestic production capacity is expected to be gradually released and reached from the fourth quarter of this year to the first quarter of next year, with an additional production capacity of about 500 million dollars after full production. At the same time, the company is also speeding up the deployment of overseas business. The proportion of new orders signed overseas this year is about 15%-20%. It has already passed the certification of qualified suppliers from many internationally renowned semiconductor chip manufacturers, new energy photovoltaic manufacturers, etc., and has already begun substantial commercial business. The expansion of the company's overseas plants is expected to achieve full production in the first quarter of 2024, at which time the overseas production capacity will increase to 150 million.
Focus on R&D investment, customer advantages are obvious
The company has maintained strong investment in R&D. In the first three quarters of 2023, the company's R&D expenditure rate was 4.95%, an increase of 0.73 pct over the previous year. The company has a full-process R&D system covering upstream core material research and development, midstream competitive product research and development, and downstream application solution development. The PTFE membrane materials jointly developed with upstream partners have achieved 60%-70% domestic replacement. Furthermore, the company's products have obvious competitive advantages in domestic and foreign new energy cleanroom businesses such as photovoltaics and lithium batteries, and orders have already been placed. Through years of hard work, the company has broken through leading enterprises in various downstream industries, including Tianma Microelectronics, SMIC, Huaxing Optoelectronics, BOE, Pfizer Pharmaceuticals, Nestle, Apple, etc.
Profit forecasting
It is predicted that the company's revenue for 2023-2025 will be 15.71, 19.96, and 2,443 billion yuan, EPS of 1.26, 1.73, and 2.23 yuan respectively. The current stock price corresponding to PE is 31, 23, and 18 times, respectively. Currently, the domestic substitution process in the semiconductor industry chain is accelerating. At the same time, demand for air filter consumables products is resilient, and the company has broad room for growth. It was covered for the first time, and a “increase in holdings” rating was given.
Risk warning
Iterative risks of technological upgrades, management risks due to expansion of business scale, risk of overseas expansion falling short of expectations, risk of downstream customer expansion falling short of expectations, etc.