The company's 2023Q4 net profit increased year-on-month. Maintaining the “Buy” rating company's 2023 annual results forecast, the expected net profit for 2023 is 424-48 million yuan, +50.12 ~ +69.95% year on year; after deducting non-net profit of 1.9-245 million yuan, or -33.44% to -14.17% year over year. Among them, 23Q4's net profit for a single quarter was 228-284 million yuan, +90.3% ~ +137.06% YoY, +160.99% ~ +225.12% month-on-month; after deducting non-net profit of 0.39-94 million yuan, -60.84% ~ -5.74% YoY, and -42.51% to +38.39% month-on-month. According to the company's 2023 performance forecast, we slightly raised the company's profit forecast. The net profit for 2023/2024/2025 is estimated to be 4.54/5.56/743 million yuan (previous value was 3.85/5.53/669 million yuan), and the estimated EPS for 2023/2024/2025 is 1.17/1.44/1.92 yuan (previous value was 1.00/1.43/1.73), and the PE corresponding to the current stock price is 22/18/13.4 times. As a leader in domestic wet process equipment, the company's market share is expected to increase at an accelerated pace and maintain a “buy” rating under the trend of domestic semiconductor substitution.
Non-recurring profit and loss increased performance. The annual increase in new orders was significant at 13.293 billion yuan in the company's new orders in 2023, compared with 4.219 billion yuan in 2022, +215.1% over the same period last year. This includes long-term orders of $8.661 billion for electronic materials and special services for a period of 5 to 15 years. The main business development was stable in 2023. The main reason for this advance increase in performance was the impact of non-recurring profit and loss. The company's non-recurring profit and loss changes in 2023 were mainly affected by the transfer of part of the shares of the participating company Weitun Jingling Electronic Materials Co., Ltd., resulting in investment income of about 125 million yuan and other fair value changes.
Semiconductor equipment continues to advance, and high-purity system integration and materials are steadily growing in the process equipment business. The company has equipment R&D and production capabilities for a full range of wet processes such as wet gluing, etching, cleaning, and brushing at 28 nm and above, covering various segments such as advanced process logic circuits, high-density storage, and characteristic processes for compound semiconductors. Research and development of advanced functions required for 14nm and 7nm processes is progressing in an orderly manner. The company has already delivered several orders to customers in 2023, and it is expected to receive more orders in the future. The company's 2023H1 order for the high-purity process system integration business, which mainly supports equipment, reached a new high. The company's products are highly competitive, and it is expected to maintain good growth in the future.
Risk warning: risk of falling industry demand; risk of falling in fab capital expenditure; technology research and development falling short of expectations.