On January 15, 2024, the company released the “2023 Annual Performance Forecast”.
Annual performance grew rapidly, and on-hand orders were plentiful
The company expects to achieve revenue of 20.97 billion yuan to 23.10 billion yuan in 2023, up 42.77% to 57.27%; net profit to mother of 36.1-4.15 billion yuan, up 53.44% to 76.39% year on year; net profit after deducting non-return to mother of 3.3 billion yuan, up 56.69% to 80.43% year on year; and new orders over 30 billion yuan, of which the integrated circuit sector accounts for more than 70%.
Looking at a single quarter, 23Q4 expects to achieve revenue of 6382-8.512 billion yuan, up 36.48% to 82.04% year on year, up 3.57% to 38.14%; net profit to mother of 7.26 to 1,266 billion yuan, up 8.87% to 89.88% year on year, up -33.11% to 16.66% month on month; net profit after deducting non-return mother of 6.60 to 1,160 billion yuan, up 4.81% to 84.21% year on year, up -35.99% to 12.51% month on month.
The product matrix continues to be rich and performance continues to improve, benefiting significantly from the megatrends of domestic substitution. The company is committed to building platform-based semiconductor equipment companies. The products cover core process equipment such as etching, film deposition, vertical furnaces, epitaxial, cleaning, and horizontal furnace tubes. In June 2023, the company released the ACE i300, a 12-inch glue remover to achieve full coverage of glue removal processes such as degluing after etching, removal of glue after ion implantation, removal of residual glue, and surface treatment. In July 2023, the company launched the 12-inch plasma etching machine Accura BE used in the crystal edge etching process to achieve a “zero” breakthrough in domestic crystal edge dry etching equipment. It has already received multiple orders from leading customers in the field of logic and storage, and has entered the mass production stage. In January 2024, Orion Proxima, a 12-inch high-density plasma chemical vapor deposition equipment independently developed by the company, officially entered client verification, marking the company's new breakthrough in insulating medium filling process technology and successfully entering the 10-billion market of 12-inch dielectric film equipment.
According to Xinmou data, the global equipment market is expected to increase 2% year on year to 115 billion US dollars in 2024, mainly due to 1) leading international fabs planning to build more advanced process production lines; 2) foundry capacity utilization is gradually breaking out of a trough, and the attitude of fabs expanding production is turning positive. The semiconductor equipment market in mainland China is expected to continue to reach a record high of US$375 billion in 2024, with a year-on-year increase of 9.6%; the localization rate of semiconductor equipment is expected to increase 1.9 percentage points to 13.6%. Leading domestic fabs such as SMIC, Huahong, Changcun, and Changxin are still expanding rapidly. It is expected that leading manufacturers in mainland China will expand production more actively in 2024, stimulating demand for semiconductor equipment.
We believe that while the company's product matrix continues to be rich, product performance is also constantly improving. It has both breadth and depth, and has significantly benefited from the major trend of domestic substitution.
Investment suggestion: In view of the continuous innovation of the company's semiconductor equipment and full on-hand orders, we adjusted the company's original performance forecast. Operating revenue from 2023 to 2025 was adjusted from 202.97/261.10/33.437 billion yuan to 218.16/305.86/39.848 billion yuan, with growth rates of 48.5%/40.2%/30.3% respectively; net profit to mother was adjusted from the original 37.81/50.25/6.430 billion yuan to 39.13/55.46/7.421 billion yuan. The growth rate was 66.3%/41.7%/33.8%, respectively; the corresponding PE was 33.1 /23.3/17.4 times, respectively. The company is committed to building a platform-based semiconductor equipment enterprise. The product matrix is constantly rich, there are sufficient orders on hand, and there is sufficient momentum for long-term growth. Continued recommendation, maintaining a “buy” rating.
Risk warning: the risk that new technologies, new processes, and new products will not be industrialized as scheduled; the risk that market competition will increase the risk; the risk that the expansion of fab capacity will fall short of expectations; systemic risks, etc.