Company profile
The company's main business is testing equipment for new display devices, and later expanded its products to the field of storage testing equipment through endogenous epitaxial extension. The company was listed on July 18, '23. The issue price was 46.77 yuan/share, and the actual capital raised was 987 million yuan. The company's IPO plans to invest 198 million in display device testing technology upgrades and equipment research and development, and plans to invest 162 million in semiconductor memory device testing equipment research and development projects. The company achieved revenue of 371 million yuan in the first three quarters of 23 years, +23.6% year-on-year, and achieved a return of 55 million yuan, or +757.3% year-on-year.
Investment logic
As an industry pioneer, the company has card layout DRAM aging test equipment and FT testing machines, and has now entered the supply chain of mainstream storage manufacturers. The testing machine is an important back-end testing equipment. The price is high and the localization rate is extremely low. According to SEMI data, SoC, memory, digital-analog hybrid, and other test machines account for 60%, 21%, 15%, and 4% of the test machine market space, respectively. Currently, the domestic storage industry is on the verge of rise, but at present, the localization rate of storage testing machines is still extremely low, and the problem of stuck necks needs to be solved urgently. The company has now developed well-known storage customers such as Changxin Storage, Payton Technology, and Jinhua Integrated for mass production and delivery. The revenue scale of the semiconductor memory device testing equipment segment is expected to reach 1.21/230/339 million yuan in 23-25, +112.7%/+90.1%/+47.3% year-on-year.
AMOLED is rapidly moving domestically, and the company's testing equipment is expected to benefit deeply. The increase in panel profitability will encourage investment in new factories, and the capital expenditure of panel factories is expected to rebound. According to Omdia's July 2023 forecast data, the panel manufacturing equipment market is expected to recover in 2024 and is expected to rebound +153 percent year-on-year to $7.8 billion in 2024. The company has excellent technical standards, a complete range of equipment, and close cooperation with major manufacturers such as Vicino. At this inflection point in the industry, it is expected to benefit deeply from the recovery in demand and the transfer of production capacity. The revenue scale of the new display testing equipment segment is estimated to reach 518/6.92/886 million yuan in 23-25, +16.8%/+33.7%/+26.5% year-on-year.
Profit forecasts, valuations, and ratings
We predict that the company will achieve net profit of 101 million yuan, 133 million yuan, and 210 million yuan respectively in 23-25. We give the company a 60 times PE valuation in 2025, with a target market value of 12.06 billion yuan, and a corresponding target price of 128.4 yuan/share. First coverage, giving the company a “buy” rating.
Risk warning
Downstream demand falls short of expectations, new product market expansion falls short of expectations, restricted stock restrictions are lifted, and there is a risk that major customers are too dependent.