Key points of investment

The performance was in line with expectations, and the equipment and materials were co-arranged.

In 2023, the company expects to achieve net profit of 43.9-4.97 billion yuan, a year-on-year increase of 50%-70%, a median increase of 4.68 billion yuan, a year-on-year increase of 60%, net profit after deducting non-return net profit of 41.12-4.71 billion yuan, an increase of 50.4%-71.7%; 2023Q4 net profit to mother is about 8.7-1.46 billion yuan, a median increase of 1.17 billion yuan, a year-on-year increase of 28%.

Photovoltaic equipment: Achieve full coverage of silicon wafers, batteries, and module equipment.

In 2006, Jingsheng laid out silicon monocrystalline furnaces, and later expanded slicers, tile stacking component equipment, and battery equipment. (1) Fifth-generation low-oxygen monocrystalline furnaces: Downstream generally requires an oxygen content of 12 PPM in the first half of 2023. Until now, it has been reduced to 10 PPM. Deoxygenation and low-oxygen monocrystalline furnaces that help improve battery efficiency are a definite trend. (2) Cell equipment: Positioning compatible with TopCon+XBC overall solution. In terms of PECVD, Jingsheng chose the fine wire route to optimize the normal distribution of battery efficiency.

Jingsheng semiconductor equipment has three major components: large silicon wafers, advanced packaging, and silicon carbide.

(1) Large silicon wafer equipment: Jingsheng is the leading domestic long crystal equipment, and can provide overall solutions for long crystal, slicing, grinding and polishing.

(2) Advanced packaging: Jingsheng has already deployed thinning machines. In terms of components, Jingsheng localized all air spindles, air bearings, etc. in 2017, and will further promote the localization of consumables.

(3) Silicon carbide epitaxial equipment: Jingsheng is a domestic leader. It launched a 6-inch double-chip epitaxial device in February 2023, and an 8-inch single-chip device in June of the same year, which is compatible with 6- and 8-inch production.

Material: layout silicon carbide substrate & quartz crucible & diamond wire.

(1) Silicon carbide substrates: 8-inch silicon carbide substrates have been mass-produced, and the core misalignment of 6-inch and 8-inch mass-produced chips can stably achieve TSD <100 pcs/m? , BPD <400 pcs/cm? It has reached the leading level of the industry. Customers include SMIC integration, etc.; (2) quartz crucible: accelerate the increase in production capacity of crucibles and continue to develop high-quality super crucibles; (3) Diamond wire: the first phase of the mass production project was put into operation and mass sales were achieved, promoting the second phase of the production expansion project and speeding up the development of tungsten diamond wire.

Profit prediction and investment rating: Photovoltaic equipment is the first curve for Jingsheng's electromechanical growth. The second curve is the volume of photovoltaic consumables and semiconductor consumables, and the third curve is the volume of silicon carbide equipment+ materials and semiconductor equipment. We maintained the company's 2023-2025 net profit of 47/58/70 billion yuan, corresponding PE of 11/9/7 times, and maintained a “buy” rating.

Risk warning: Downstream production expansion falls short of expectations, and new product expansion falls short of expectations