MayAir Technology announced its 2023 performance report:
Full year of 2023: Achieved operating income of 1,503 billion yuan, yoy +22.54%, realized net profit of 173 million yuan, yoy +40.73%, realized net profit without return to mother of 151 million yuan, yoy +33.05%, net interest rate to mother 11.52%, +1.49pct year on year, net interest rate of 10.02% year-on-year, and +0.79pct year-on-year.
Q4 2023: Achieved revenue of 432 million yuan, yoy +11.03%, qoq +2.73%; realized net profit of 44 million yuan, yoy +19.29%, qoq -14.97%, net interest rate 10.24%, year-on-year, basically flat year-on-year, with a slight decrease of 2.13pct month-on-month; realized net profit of 43 million yuan, yoy +44.48%, qoq +5.65%, net interest rate without return to mother of 9.90%, up 2.29pct year on year, basically flat month-on-month.
Comment: Overall, the company's revenue has increased steadily, and the net interest rate (after deduction) has increased to a certain extent. We think there are three main reasons: 1. The gross profit margin in overseas markets is higher, and the company actively explores overseas markets and achieves results; among the company's products, the filter gross margin is higher, this product has consumables, and the expansion of the company's incremental market introduction has a cumulative effect, causing the share of filter revenue to rise. 2. Cost side: The company strengthens operation management and actively promotes cost reduction and efficiency. 3. Other: The company's financial income has increased.
Core growth logic: The incremental market places equal emphasis at home and abroad, and the stock market filter consumables logic is gradually clear Company profile:
Main products: The company's main products include filters, fan filter units, air purification equipment, industrial dust and oil mist removal equipment, VOCs control equipment, etc., which can be used in clean room air purification, indoor air quality optimization, and air pollution emission control. It is the leading semiconductor cleanroom in China.
In terms of products, filters and fan filter units contribute the vast majority of revenue sources. In H1 in 2023, the two accounted for about 83.50% of total revenue. Among them, filter revenue accounted for the highest share in 2019-2021 (combined caliber of filters and fan filter units in 2022).
According to the application scenario, clean rooms are the company's largest downstream market. In 2020-2023 H1, the company's clean room scenario accounted for more than 70% of revenue.
Logic 1. Incremental markets: equal emphasis at home and abroad
Domestic market: The company has a market share of 30% in domestic semiconductor cleanroom equipment. It began to be a supplier of FFU and filter products to various SMIC manufacturers in 2006, and introduced its 28/14nm production line. At the same time, the company supplies ultra-thin equipment in Shanghai with ultra-thin fan filter units, which also passed the inspection. The company has excellent technical strength, binds leading domestic semiconductor and panel customers, and is expected to continue to benefit in the context of domestic substitution. In addition, the company is actively expanding application fields such as biomedicine, which is conducive to smoothing the effects of cycle fluctuations.
Overseas markets: In recent years, the company has actively explored overseas markets, especially in Southeast Asia. It has successively found/acquired several subsidiaries, passed the qualification certification of many famous pan-semiconductor manufacturers, and supplied air purification products to benchmark companies such as ST, AMD, and TI. Relying on the overseas expansion strategy, the company's overseas revenue CAGR for the past three years is close to 50% (2023 semi-annual report data). The company's executives have an international perspective, which will lay the foundation for the company to further explore overseas markets.
Logic 2. Stock market: The expansion of the scale of early introduction of the incremental market forms a cumulative effect, and the logical interpretation of filter consumables
Filters have consumable properties. The average filter replacement frequency ranges from 6-12 months (middle efficiency filters) or 2-8 years (high efficiency filters). After years of development, the company has established stable cooperative supply relationships with most downstream customers in various fields. In addition to supplying equipment when the clean room was first built, the company continues to provide customers with subsequent filter equipment replacement, and stock replacement provides strong support for the stability and sustainability of the company's development. Furthermore, the gross margin of filters is higher. We expect that as stock demand increases, the company's gross margin will increase steadily, and the company's future gross margin of consumables will reach 30-40%.
Profit forecast and valuation: We expect the company's revenue in 2023-2025 to be 15.04, 19.35, 2.03 billion yuan, yoy +22.54%, +28.72%, +24.17%, net profit to mother of 1.73, 2.42, 310 million yuan, yoy +40.73%, 39.73%, and 28.27%, corresponding PE is 26/19/15X. According to the closing price of February 23, 2024, the average PE of the three comparable companies is 22X. The company is a domestic semiconductor Clean room equipment leaders, vigorously expand overseas businesses with higher gross margins, and gradually release high-margin consumables. This will have a good effect on the company's performance. We give the company a “recommended” rating.
Risk warning: Downstream customer production expansion progress falls short of expected risk, overseas expansion progress falls short of expected risk, gross margin fluctuation risk.