Key points of investment
Focus on company development and continue to improve the governance structure & information disclosure, etc. The company has launched five specific measures, (1) focusing on advanced materials+advanced equipment strategies to improve the quality of development: continuously promoting two-wheel drive of materials+equipment; (2) strengthening R&D technology innovation to lead high-quality development with continuous innovation: continuing to increase investment in R&D, and has launched superconducting magnetic field low oxygen monocrystalline furnaces, battery equipment, silicon carbide epitaxial equipment, etc.; (3) consolidating governance and improving the level of standardized operation: building a full internal control system to promote “three sessions and one layer” due diligence, etc.; (4) Continuously improve the quality of information disclosure, and strengthen communication with investors: Information on exchanges since listing In the disclosure rating, it has been rated A for 10 consecutive years; (5) Establishing a strong return to investors; (5) Since 2022, the company has implemented two share repurchases, using a total of about 200 million yuan of its own capital, cumulatively repurchased 3.93 million shares, and has continued to implement cash dividends since listing. The dividend amount has remained at least 20% of the consolidated net profit to mother, and the cumulative dividend amount has exceeded 1.8 billion yuan.
Photovoltaic equipment: Achieve full coverage of silicon wafers, batteries, and module equipment. In 2006, Jingsheng laid out silicon monocrystalline furnaces, and later expanded slicers, tile stacking component equipment, and battery equipment. (1) Fifth-generation low-oxygen monocrystalline furnaces: Downstream generally requires an oxygen content of 12 PPM in the first half of 2023, but it has now been reduced to 10 PPM. Deoxygenation and low-oxygen monocrystalline furnaces that help improve battery efficiency are a definite trend. (2) Cell equipment: Development of tubular PECVD, LPCVD, diffusion, annealing, single-chamber multi-vessel ALD, and boat dry cleaning.
Semiconductor equipment positioning has three major components: large silicon wafers, advanced packaging, and silicon carbide. (1) Large silicon wafer equipment: Jingsheng is the leading domestic long crystal equipment, and can provide overall solutions for long crystal, slicing, grinding and polishing. (2) Advanced packaging: Jingsheng has already deployed thinning machines. In terms of components, Jingsheng localized all air spindles, air bearings, etc. in 2017, and will continue to localize consumables. (3) Silicon carbide epitaxial equipment: As a domestic leader, Jingsheng launched a 6-inch double-chip epitaxial device in February 2023, and an 8-inch single-chip device in June of the same year, which is compatible with 6- and 8-inch production.
Material: layout silicon carbide substrate & quartz crucible & diamond wire. (1) Silicon carbide substrates: 8-inch silicon carbide substrates have been mass-produced, and the core misalignment of 6-inch and 8-inch mass-produced chips can stably achieve TSD<100 units/m2 and BPD<400 units/cm2 to reach industry-leading levels. Customers include SMIC integration, etc.; (2) Quartz crucibles: Accelerate the increase in production capacity of crucibles and continue to develop high-quality super crucibles; (3) Diamond wire: The first phase mass production project was put into operation and mass sales were achieved, and the second phase of the diamond wire research and development was accelerated.
Profit prediction and investment rating: Photovoltaic equipment is the first curve for Jingsheng's electromechanical growth. The second curve is the volume of photovoltaic consumables and semiconductor consumables, and the third curve is the volume of silicon carbide equipment+ materials and semiconductor equipment. We maintained the company's 2023-2025 net profit of 47/58/70 billion yuan, corresponding PE of 9/7/6 times, and maintained a “buy” rating.
Risk warning: Downstream production expansion falls short of expectations, and new product expansion falls short of expectations.