The share repurchase shows confidence. The leading soldering equipment company enters semiconductor packaging to begin new growth on February 7, 2024. The company issued an announcement. In order to protect the company's value and shareholders' rights, it plans to use its own funds to repurchase through centralized bidding transactions. The repurchase price shall not exceed RMB 33 per share (inclusive), and the repurchase amount shall not be less than RMB 20 million (inclusive) and not exceed RMB 40 million (inclusive). This buyback shows the company's confidence in future business development. Considering that the overall boom in the consumer electronics industry is weak in 2023, we slightly lowered our profit forecast. We expect to achieve net profit of 2.0/3.0/380 million yuan (original value of 2.1/36/4.7 billion yuan) in 2023-2025, EPS of 0.8/1.21/1.52 yuan, and current stock price corresponding to PE 22.7/14.9/12.0 times. The company is the single champion in the domestic electronic assembly precision welding equipment category. It reuses continuously advanced welding technology to expand growth space in the fields of new energy and semiconductors, and maintains a “buy” rating.
Precision soldering and AOI equipment create the cornerstone of performance
The company is the core supplier of wearable production line welding and AOI equipment for customer A, and the comprehensive gross margin remains above 50%. It officially entered the Apple phone production line in 2023, and the market space to participate in competition was expanded. Looking ahead to 2024, the transfer of Apple production capacity to Southeast Asia and other regions and the use of new Apple phone technology are expected to bring demand for new devices, and the company's consumer electronics business performance is guaranteed to grow at a high rate.
A new star in semiconductor packaging equipment sets sail
3C welding is in line with some of the technologies in semiconductor solidification, curing, and bonding. In 2023, the company's self-developed nanosilver sintering equipment (supply H, Lixun Precision) and high-speed high-precision crystallizer were successfully shipped and fulfilled expectations, proving the company's R&D strength in the field of semiconductor back-end equipment. Computing power has become the focus of the big power game. According to our estimates, the total investment amount for advanced packaging equipment is expected to reach 66.11 billion yuan based on domestic demand for intelligent computing power in 2024-2033. Currently, the company is developing an inverted crystal fixing machine (compatible with the mainstream 2.5D advanced packaging process CowOS). The Japanese R&D team's technical accumulation in the field of high-end crystal soldering machines is expected to accelerate the prototype launch process. In the future, the company will continue to expand solid crystal bonding equipment with higher barriers and upgrade to a semiconductor packaging equipment solution provider.
Risk warning: Revenue from consumer electronics-related businesses fell short of expectations, and the launch of inverted crystal fixing machines fell short of expectations.