[Investment points]
Leading domestic semiconductor and silicon carbide long crystal equipment companies, covering leading downstream material manufacturers, and Shanghai silicon industry, pioneered the localization of 12-inch semiconductor-grade single crystal furnaces and actively deployed silicon carbide pultrusion equipment. The main products are used in the preparation of 8-12 inch lightweight, heavy semiconductor silicon wafers, batch processing of 28nm and above, and 6-inch silicon carbide single crystal substrate preparation. Customers cover the Shanghai silicon industry (Shanghai Xinsheng), Lionwei (Jin Ruihong), Shengong Co., Ltd., San'an Optoelectronics, Tony and Zhejiang Jingtou, etc. Department material manufacturer, operating in 2019-2022 The compound growth rate of revenue reached 113.07%.
The expansion of advanced silicon wafer production capacity is compounded by the domestic replacement process. Demand for large semiconductor single crystal furnaces is strong. China's semiconductor silicon wafer industry is currently facing problems such as a late start time, low market share, and relatively little advanced production capacity. Affected by factors such as the iteration of large-size silicon wafer technology, large-scale expansion and market share growth of downstream silicon wafer manufacturers, and the acceleration of domestic equipment replacement processes, the semiconductor single crystal furnace market space in 2022-2025 is about 9.747 billion yuan. The company, as a leading domestic semiconductor processing equipment company, is expected to take the lead in benefiting.
The silicon carbide industry is on the eve of an industrial explosion. The upstream equipment side is expected to usher in the release of silicon carbide substrates as the core link in the industrial chain. Crystallization equipment is also the key to affecting the quality of substrates.
According to estimates, the compound annual growth rate of domestic silicon carbide substrate production capacity is close to 60% in the next 5 years, which will bring about 7.440 billion yuan of silicon carbide single crystal furnace market space. The company is in the first tier of domestic suppliers, with a market share close to 30%. Currently, it is deeply tied to leading domestic substrate manufacturers such as Sanan Optoelectronics, and continues to promote the first set of equipment verification for new customers, with huge potential for growth.
Entering the photovoltaic field based on technological homogeneity and further opening up the growth ceiling The company has entered the field of photovoltaic monocrystalline furnaces based on technological homogeneity. Currently, it has signed an equipment procurement contract with the photovoltaic silicon chip company Sichuan Gaojing Solar to supply them with a complete photovoltaic monocrystalline furnace. The order amount has reached 339 million yuan (tax included), which is expected to further open up the ceiling for subsequent performance growth.
Fund-raising projects help expand production capacity and provide necessary guarantees for business development. The company's IPO fund-raising projects include headquarters production and R&D center construction projects and semiconductor crystal growth equipment assembly testing plant construction projects. The estimated investment is about 476 million yuan. After delivery, the project is expected to increase production capacity: ① semiconductor single crystal furnace production capacity: 25 units/year; ② silicon carbide single crystal furnace production capacity: 1,100 units/year, providing production capacity guarantee for the company's future business development.
[Investment advice]
Based on the expansion of production by downstream manufacturers, the company's market share and related financial data, we expect the company's 2023-2025 operating income to be 4.20/7.29/1,147 billion yuan, net profit of 0.69/1.50/227 million respectively, EPS of 0.50/1.08/1.64 yuan, corresponding PE of 108.76/50.27/33.20 times, respectively, covering the “increase in holdings” rating for the first time.
[Risk Reminder]
The expansion of production by downstream material manufacturers fell short of expectations;
The risk of a high level of customer concentration;
The product promotion and verification situation fell short of expectations.