occurrences

De'Longhi Laser announced on November 9, 2023, that it intends to purchase 100% of Corning Laser Technologies GmbH (Corning Laser, Germany) and some assets held by Corning International through its own/self-funded capital. The purchase price is not expected to exceed 15 million euros.

Key points of investment

It is proposed to acquire 100% of the shares of Corning Laser in Germany to make full use of synergies

Germany's Corning Laser has innovative laser glass cutting and drilling technology. It has core technology in fine microprocessing such as AR, micro LED displays, and glass through-hole processing (TGV), as well as macro-processing and wafer processing in the automotive industry, smart glass, and 3D component processing. The acquisition of Corning Laser from Germany helped the company expand its products in the field of fine laser microprocessing and wafer processing, while also expanding its macro-processing product line.

The synergy between the company and German Corning Laser is obvious: (1) At the technical level, the company's laser light source technology and products can play an important role in the process development and cost reduction of German Corning Laser, while Germany's Corning Laser's 3D laser processing technology and glass through-hole technology can further strengthen the company's technical map; (2) At the market level, the company's customers are concentrated in China, while German Corning Laser customers are concentrated in Europe and America, and this acquisition will help the company expand the global market; (3) At the personnel level, this acquisition will help the company to provide technical support and after-sales service for German Corning Lasers in the Chinese market At the same time, Germany's Corning Laser will enhance the company's global marketing and service capabilities.

Deeply involved in precision laser processing equipment, advanced packaging, and broad prospects for micro LED

The company's main products are precision laser processing equipment and lasers. According to different downstream application fields, the company's precision laser processing equipment includes laser processing equipment in the semiconductor field, laser processing equipment in the display field, laser processing equipment in the new electronic field, and laser processing equipment in the new energy field.

The company's product layout of laser processing equipment in the semiconductor field includes: (1) cutting and slicing of various semiconductor wafers such as silicon carbide and gallium nitride; (2) LED/Mini LED wafer cutting and fragmentation; (3) micro LED laser peeling, massive laser transfer; (4) traditional packaging and advanced packaging applications for integrated circuits: such as laser debonding, auxiliary welding, wafer marking, laser grooving, 3D stacked chip drilling, etc. The fully automatic wafer ID laser marking machine and fully automatic wafer glass laser microporous equipment developed by the company can all be used in advanced packaging fields.

The laser processing equipment developed by the company in the display field is mainly used for cutting, repairing and etching of TFT-LCD, AMOLED, Mini/Micro LED and silicon-based OLED displays. Among them, the Micro LED laser repair equipment has LaserTrimming and Pad Cleaning functions to meet the laser repair needs of Micro LED; the Mini/Micro LED film cutting equipment is equipped with a CO2 laser and a self-developed optical path system to achieve high-precision, residue-free film cutting.

Profit forecasting

It is predicted that the company's revenue for 2023-2025 will be 4.73, 5.92, and 738 million yuan respectively, and EPS will be -0.05, 0.55, and 0.93 yuan respectively. The current stock price corresponding to PE is/, 73, and 43 times, respectively. Due to factors such as the long order acceptance cycle and the increase in R&D expenses, etc., the company's revenue and profit this year are under pressure year on year, but we are optimistic about the company's layout and R&D capabilities of laser processing equipment in the semiconductor and new energy fields, and the company's order growth rate this year is obvious. The equipment inspection cycle is mostly 6-12 months. We are optimistic that the company will return to the growth channel next year and maintain an “increase in holdings” investment rating.

Risk warning

The future performance of the target company falls short of expectations, risk of impairment of goodwill, risk of business collaboration falling short of expectations, risk of transaction approval, risk of business integration, risk of failure of both parties to the transaction, risk of exchange rate fluctuations, etc.