Matters:
On January 21, the company released its 2023 annual performance forecast. It is expected to achieve operating revenue of 2.3 billion yuan to 2.7 billion yuan in 2023, an increase of 39.49% to 63.75% over the previous year.
Ping An's point of view:
New and old businesses go hand in hand, and the scale of revenue and profit has been further expanded: in terms of revenue, the company expects to achieve operating revenue of 2.3 to 2.7 billion yuan in 2023, an increase of 39.49% to 63.75% over the previous year. In terms of profit, net profit attributable to mother is estimated to be 659 million yuan to 774 million yuan, up 31.38% to 54.31% year on year; net profit after deduction is estimated to be 553 million yuan to 647 million yuan, up 45.54% to 70.28% year on year. In a single quarter of the fourth quarter, the company is expected to achieve revenue of 460 million yuan to 860 million yuan, up 28.16% year on year and 8.91% month on month, with a median increase of 660 million yuan, with a year-on-month increase of 8.91%, and net profit without return to mother expected to be 94 million to 188 million yuan, based on a median value of 141 million yuan, a year-on-year increase of 23.68% and a decrease of 7.24% month-on-month. The main reason for the expected increase in the company's 2023 performance over the same period of the previous year is the continuous increase in the market share and sales scale of the company's CMP products; at the same time, the development of new businesses such as wafer regeneration, CDS and SDS is beginning to show results, increasing the company's revenue and profit scale.
Business expansion progressed smoothly, and business prototypes in the fields of cleaning and thinning began to emerge: the company attached great importance to the technical and performance upgrades of CMP products, launched new functions, new modules and products to meet the requirements of more materials and more advanced processes, further increased investment in R&D, and continued to promote CMP equipment development and process breakthroughs for higher performance and more advanced nodes. In addition to CMP, the company's platform-based expansion has also achieved positive results. Thinning equipment, wet equipment, and film thickness testing equipment are all arranged. Among them, the 12-inch ultra-precision wafer thinning machine Versatile-GP300 is the first organically integrated equipment in the industry to achieve ultra-precision grinding of 12-inch wafers and overall flattening of CMP. It has received small-batch orders, and several devices have been sent to different clients for verification in 23 years.
Huahai Qingke Beijing, a wholly-owned subsidiary of the company, implemented the “Huahai Qingke Integrated Circuit High-end Equipment R&D and Industrialization Project” in the Beijing Economic and Technological Development Zone to develop and industrialize high-end semiconductor equipment such as chemical mechanical polishing equipment, thinning equipment, wet equipment, etc. The construction period is expected to be 26 months. The project will further expand the company's production and operation scale and enhance technology research and development capabilities, thereby enhancing the company's core competitiveness.
Investment advice: The company has formed an “equipment+service” business layout and is fully benefiting from the wave of localization. The products have been verified or mass-produced and used on major domestic wafer manufacturing production lines, and have great potential for growth. We maintain the company's profit expectations. The company's net profit for 2023-2025 is expected to be 708 million yuan, 938 million yuan, and 1,174 million yuan, respectively, and EPS is 4.46 yuan, 5.90 yuan, and 7.39 yuan respectively. The PE corresponding to the closing price of January 19 is 40.9X, 30.9X and 24.7X, respectively. We continue to be optimistic about the company's subsequent development and market position, and maintain a “recommended” rating for the company.
Risk warning: 1) Downstream capital expenditure falls short of expectations; 2) Localization progress falls short of expectations; 3) Market competition intensifies.