Core views:
The impact of industry cycle adjustments compounded production expansion and depreciation, putting pressure on operating results in 23 years. The company released its 23-year performance forecast. In '23, the company expects net profit to be 168-210 million yuan, a year-on-year decrease of 48.31% to 38.16%. It is estimated that net profit losses not attributable to mother will be deducted in '23, which is -1.8 to -144 million yuan. The decline in the company's performance compared to '22 was mainly affected by the market and continued investment in the company's production expansion projects. Among them, according to SEMI statistics, global semiconductor silicon wafer shipments fell 14.3% in '23 compared to '22 due to continued weakness in the terminal market, high inventories in the semiconductor industry, and macroeconomic conditions. During the reporting period, the company's semiconductor silicon wafer revenue fell by about 12% year on year due to the overall market impact, leading to a corresponding decrease in operating profit. At the same time, the company's multiple production expansion projects in 23 years, including the 300mm high-end silicon wafer production expansion project for integrated circuits, the 300mm high-end silicon-based material research and development pilot project, and the 200mm semiconductor specialty silicon wafer production expansion project were progressing in an orderly manner. Among them, the 300mm high-end silicon wafer expansion project for integrated circuits had released a new production capacity of 150,000 wafers/month by the end of 2023, with a total production capacity of 450,000 wafers per month. During the implementation process, production expansion projects will incur certain upfront costs and increase large fixed costs, which will have a great impact on the company's operating performance during the reporting period.
Steadily promote capacity reserves and market expansion, and wait for the industry cycle to recover. According to the company's 23 semi-annual report, the company aims to become a “one-stop” integrated service provider for silicon materials, while taking into account the upstream and downstream localization layout of the industrial chain. The company continues to advance production capacity construction for 300mm semiconductor silicon wafers and advance 300mm high-end silicon-based material research and development pilot projects, and has become a qualified supplier for well-known domestic and foreign customers. Customers are spread all over North America/Europe/Asia, covering major chip manufacturers including TSMC/SMIC/Huahong Hongli. With the advent of production capacity and scale advantages, the improvement of the product portfolio, and the advancement of customer expansion, the company has broad room for future growth.
Profit forecasting and investment advice. The company is expected to achieve EPS 0.07/0.15 yuan/share in 23-25 years. Considering the company's leading position in the domestic silicon wafer industry and its continuous expansion capacity scale advantage, the company's view of a reasonable value of 26.52/shares remains unchanged, and maintains a “buy” rating.
Risk warning. Downstream demand fell short of expectations, production capacity climbed short of expectations, and market competition intensified.