Deeply cultivate integrated yield improvement tracks and build a collaborative ecosystem of software and hardware. Founded in 2003, Guangliwei is a leading supplier of integrated circuit EDA software and wafer-level electrical testing equipment. Over the years, it has used industry-leading full-process platforms and technical methods for efficient test chip automatic design, high-speed electrical testing, and intelligent data analysis to provide Foundry and Fabless manufacturers with a series of products and services from EDA software, test chip design services, electrical testing equipment to data analysis, etc. Currently, it has formed the three core business components of “software development and licensing, testing equipment and accessories, testing services and others”.

A leading domestic racetrack company that boosts yield. As a leading supplier of integrated circuit EDA software and wafer-level electrical testing equipment in China, the company's business focuses on yield improvement and electrical monitoring. It has expanded from software to hardware products. WAT testing machines have successfully entered customers and become the company's main business since 2022. The company achieved revenue of 360 million yuan in 2022, an increase of 79.48% over the previous year, and a compound growth rate of 84.09% in 2018-2022, mainly benefiting from the expansion of downstream customers and the wave of localization, and the rapid expansion of the company's testing machine and accessories business.

Process upgrade+production capacity expansion, highlighting the importance of yield management. As the process is upgraded, the effect of increasing yield on increasing the profit of the fab factory is even more obvious, driving the fab factory's requirements for the testing process to increase. For every 1% increase in yield, 3DNAND fab can increase annual net profit by $110 million; for every 1% increase in yield, cutting-edge logic fab can increase annual net profit by $150 million. Production capacity in mainland China continues to expand, and eight fabs are about to be put into operation, driving demand for yield management.

Software+hardware linkage to achieve collaborative growth. Guangli Micro focuses on improving integrated circuit yield and manufacturing EDA. The product is extremely sticky and can provide full-process data analysis and management. It has entered world-class integrated circuit companies such as Samsung Electronics, Huahong Group, Hefei Jinghe, and Changxin Storage, breaking the monopoly situation of overseas companies. WAT testing machines have high barriers and high requirements for test accuracy, efficiency, and system software adaptability. The company has achieved localization for the 8/12 inch T4000/T4100S, profoundly benefiting from the expansion of production by mainland wafers.

As the company's EDA software and data analysis platforms continue to be introduced to customers and testing equipment has passed verification, we expect the company to achieve revenue of 6.4/9.8/1.32 billion yuan in 2023/2024/2025, net profit of 1.8/30/500 million yuan, and PE of 90.8/53.6/32.7x in 2023-2025, giving it a “highly recommended” rating.

Risk warning: Risk of seasonal characteristics of main business revenue, risk of new product development and customer introduction falling short of expectations, and increased international trade friction.