2023 forecast profit growth of 31.38% to 54.31% year-on-year
Huahai Qingke announced an advance announcement of its 2023 annual results. The company expects to achieve operating income of 2.3 to 2.7 billion yuan in 2023, an increase of 39.49% to 63.75% over the previous year, and achieve net profit of 659 million yuan to 774 million yuan, an increase of 31.38% to 54.31% over the previous year. Due to seasonal fluctuations, revenue recognition progress is lower than expected, and net profit to mother is in line with expectations.
Key points of interest
Revenue and profit achieved rapid year-on-year growth: The company expects to achieve operating income of 2.3 billion yuan to 2.7 billion yuan, a year-on-year increase of 39.49% to 63.75%; 4Q23 expects to achieve operating income of 4.6 to 860 million yuan, with a median value of 679 million yuan, a slight increase over 3Q23; the company expects to achieve net profit of 659 million yuan to 774 million yuan in 2023, an increase of 31.38% to 54.31% over the previous year. 4Q23 expects to achieve net profit of 0.95 to 210 million yuan. The main reason is the rapid increase in the market share of the company's CMP equipment business, and the orderly expansion of new businesses such as wafer regeneration, CDS, and SDS.
The product line has expanded one after another, opening up the company's second growth curve: According to the company's announcement, the company's first 12-inch single-chip terminal cleaning machine, the HSC-F3400 machine has been shipped to leading domestic silicon wafer companies. At the same time, the company has developed a Versatile-GP300 all-in-one thinning and polishing machine, which is mainly suitable for backside thinning processes in front-end wafer manufacturing to meet 3D IC's integrated process requirements for ultra-precision grinding, CMP and cleaning. It has been successfully verified on the client side; film thickness measurement equipment used in Cu, Al, W, Co and other metal processes- FTM The M300 has been shipped in small quantities, and as the company's product line continues to expand, we think it is expected to open up the company's second growth curve.
Global fabs are expected to resume CAPEX in 2024, and we are optimistic that the company's orders will continue to grow. According to SEMI statistics, the global market for global wafer processing equipment in 2023 was US$90.6 billion, down 3.7% year on year. The market size is expected to grow 3% to US$93.3 billion in 2024, and the market size is expected to grow 18% to US$110 billion in 2025. We believe orders are expected to continue to grow as fab capital expenditure recovers one after another and the market share of superimposed companies further increases.
Profit forecasting and valuation
Due to seasonal factors affecting the company's revenue recognition pace, we lowered the company's 2023 revenue forecast by 10% to 2,519 billion yuan, keeping the 2023 net profit forecast and 2024 overall profit forecast unchanged, and introducing the 2025 profit forecast. We expect the company to achieve operating income of 34.98/4.436 billion yuan in 2024/2025, respectively, and achieve net profit of 9.46/1,218 billion yuan. The current stock price corresponds to 30.6/23.8xp/E for 2024/2025. Due to the rapid growth rate of the company's performance, we switched to a 2024 41.9x P/E valuation, keeping the target price of 249.05 yuan unchanged, corresponding to the company's 32.4x P/E in 2025. There is still 36.7% room to rise compared to the current stock price, maintaining an outperforming industry rating.
risks
Fab capital expenses have declined, new product development verification falls short of expectations, and component supply risks.