occurrences
On January 16, the company announced its 2023 performance forecast. It is expected to achieve revenue of 209.7-23.10 billion yuan in 23, up 42.77%-57.27% year on year; net profit to mother of 36.1-4.15 billion yuan, up 53.44%-76.39% year on year; net profit without return to mother of 33-38 billion yuan, up 56.69%-80.43% year on year.
Key points of investment
The performance exceeded expectations, and the scale effect was outstanding. The company expects to achieve revenue of 209.7-23.10 billion yuan in 23 years, an increase of 42.77%-57.27% over the previous year; thanks to the company's continuous efforts to reduce costs and increase efficiency, the diversified supply chain support capacity is continuously enhanced, mass production delivery levels are effectively raised, and the scale effect is gradually showing. The company expects to achieve net profit of 36.44%-76.39% over the previous year in 23, an increase of 53.44%-76.39%, net profit of 33-3.8 billion yuan over the previous year.
Orders have increased dramatically, with ICs accounting for over 70%. The company signed more than 30 billion yuan of new orders in '23, of which the integrated circuit sector accounted for more than 70%, mainly because the company always insisted on customer needs-oriented product innovation. In '23, the main business showed a good development trend, and market recognition continued to increase. Dozens of process equipment such as etching, film, cleaning, and furnace tubes used in the high-end integrated circuit field achieved technological breakthroughs and mass production applications, and the process coverage and market share increased dramatically.
In 24 years, mainland China's WPM production capacity may have reached 8.6 million tablets. On January 2, 2024, California time, SEMI announced in its latest quarterly “World Fab Forecast Report” that global semiconductor monthly wafer (WPM) production capacity is expected to grow 6.4% in 24 years after increasing 5.5% to 29.6 million sheets in 23 years (full WPM calculated in 200mm equivalent). SEMI expects chipmakers in mainland China to start operating 18 projects in '24. After a 12% year-on-year increase in production capacity to 7.6 million wafers per month in '23, production capacity will increase 13% year-on-year to 8.6 million wafers per month in '24, and equipment investment is expected to continue to grow.
The business layout of platform-based companies continues to improve. The company's semiconductor equipment continues to make new breakthroughs, such as: 1) In terms of etching equipment, on July 1, 2023, the company officially released the 12 inch plasma etching machine Accura BE used in the Bevel Etch (Bevel Etch) process to achieve a “zero” breakthrough in domestic crystal edge dry etching equipment and tailor yield improvement and efficiency solutions for advanced chip manufacturing in China. As soon as it was released and launched, Accura BE has received multiple orders from leading customers in the field of logic and memory. Through process debugging, it has entered the mass production stage. Its excellent process uniformity, transmission stability and rapid maintenance capabilities have won high praise from customers. 2) In terms of thin film equipment, official WeChat revealed on January 8, 2024. Recently, Orion Proxima, a 12-inch high-density plasma chemical vapor deposition (HDPCVD) device independently developed by the company, officially entered client verification. At the same time, equipment such as furnace tubes and cleaning equipment continues to receive repeated orders, and the business layout of platform-based companies continues to improve.
Investment advice
We expect the company to achieve revenue of 220/301/40 billion yuan in 2023/2024/2025, and realized net profit of 40/57/78 billion yuan respectively. The current stock price is 33 times, 23 times, and 17 times PE for 2023-2025, respectively, maintaining a “buy” rating.
Risk warning
Risk of uncertainty in the external environment; risk of technology iteration; risk of human resources risk; risk of downstream production expansion falling short of expectations.