Key points of investment
Short-term results are under pressure, and gross margin declined year-on-year in the first three quarters
In the third quarter of 2023, the company's revenue declined sharply from month to month, and the company achieved revenue of only 80 million yuan. This is mainly due to the downturn in the consumer electronics industry and MR Pancake equipment products in the downstream customer acceptance stage. The company's gross margin for the first three quarters was 32.9%, down 2.7 pct year on year. This was mainly due to the company facing increased expenses for new business development and new product development, as well as increases in equity incentive share payment fees and “Shenke Bonds Transfer” interest.
Deeply cultivate product research and development, and cooperate deeply with high-quality enterprises
The company insists on independent innovation and continues to invest high capital in technology research and development. As of January-September 2023, the company invested 705.513 million yuan in R&D, an increase of 18.39% over the previous year, and the R&D expenditure rate was 14.92%. The company's R&D department already has the ability to provide semiconductor back-end sealing and testing, OLED and LCD display device back-end manufacturing equipment, and has production capacity for semiconductor devices, flat panel display peripheral component assembly equipment and testing equipment. As of the end of June 2023, the company has obtained 502 patents and 83 software copyrights.
The company adheres to the core value concept of “in-depth cooperation, scientific and technological innovation, and achieving a win-win situation”, has won customer recognition with excellent performance, advanced technology, exquisite craftsmanship, delivery control and after-sales service systems, and has established cooperation with high-quality customers such as Yangjie Technology, Tongfu Microelectronics, and Huatian Technology. The company focuses on building its own brand and has won many honors, such as the National Intellectual Property Advantage Enterprise and the Guangdong Intelligent Manufacturing Pilot Demonstration Project. The holding subsidiary Shenkeda Semiconductor received industry awards and became Yangjie Technology's preferred supplier in the semiconductor test and sorter business.
Leading intelligent equipment company, vigorously exploring the VR/MR market
Currently, the company's products cover fields such as semiconductor equipment industry, flat panel display equipment industry, camera module equipment, etc., and have been extended to the field of key components in the intelligent field. The company closely tracks advanced technology in the intelligent equipment industry and focuses on technology accumulation and new product development to cope with market changes. Currently, the company is actively developing new equipment such as VR/MR production equipment, translational, gravity, and dual-track test sorters. Among them, the company's development in the field of VR equipment has potential and opportunities. It has now achieved an important breakthrough in the MR Pancake optical module production side of VR glasses, and has been able to provide advanced production equipment such as 3DVR thermoforming and bonding equipment, 3DAA gluing equipment, and IJP equipment. In the future, the company will continue to refine the company's product categories around new markets and demands related to VR/MR.
Profit forecasting
The company's revenue for 2023-2025 is estimated to be 7.92, 8.95, and 1.10 billion yuan, respectively, EPS 0.11, 0.15, and 0.22 yuan, respectively. The current stock price corresponds to PE of 324, 241, and 162 times, respectively. We are optimistic about the company's business layout in the field of intelligent equipment. We covered it for the first time, and gave it an “gain” rating.
Risk warning
The macroeconomic environment fluctuates, industry competition intensifies, international trade policy uncertainty intensifies, and the consumer electronics industry continues to be sluggish.