Market share is growing steadily, and product diversification is progressing rapidly. The company released its 23-year performance forecast.

In '23, the company expects operating income of about 23-2.7 billion yuan, a year-on-year increase of 39.49%-63.75%, and net profit to mother of 659-774 million yuan, up about 31.38%-54.31% year on year. Net profit after deducting non-return to mother is 553-647 million yuan, an increase of about 45.54%-70.28% year on year. The company actively grasped the market opportunities brought about by demand in the integrated circuit industry, continued to increase R&D investment and production capacity building, and enhanced its core competitiveness. As one of the key process equipment for advanced integrated circuit manufacturing, the company's CMP products continued to increase in market share and sales scale. At the same time, the development of new businesses such as wafer regeneration, CDS and SDS began to show results, increasing the company's revenue and profit scale.

The leading advantage of CMP equipment is stable, and the platform-based layout broadens the room for growth. According to the company's 23 semi-annual report, the company attached great importance to technical and performance upgrades of CMP products, launched new functions, new modules and new products that meet the requirements of more materials and processes, and continued to promote CMP equipment development and process breakthroughs for higher performance and more advanced nodes. The company launched the Universal H300 machine, which greatly improved the technical performance of the whole machine, and was also more flexible and rich in applicable processes, and completed product development and basic process performance verification; based on the accumulation of CMP equipment, the company innovated and developed in a forward-looking manner The Versatile-GP300 all-in-one thinning and polishing machine is mainly suitable for backside thinning processes in front-end wafer manufacturing to meet 3DIC's integrated process requirements for ultra-precision grinding, CMP and cleaning, and has been successfully verified on the client side. With the company's outstanding advantages in the CMP field and the launch of several new categories of equipment products, the company is expected to take the lead in benefiting from the expansion of downstream wafer production lines and the domestic replacement process of equipment.

Profit forecasting and investment advice. The company's revenue for 23-25 is estimated to be 25.82/36.53/4.581 billion yuan, with net profit of 729/9.92/1,293 billion yuan. Referring to comparable company valuations, considering the company's leading position in CMP equipment and the growth space brought about by category expansion, the company will be given 40 times PE in 2024, corresponding to a reasonable value of 249.61 yuan/share, maintaining a “buy” rating.

Risk warning. Fab production expansion falls short of expectations; changes in industrial policy; market development falls short of expectations.