Affected by factors such as declining industry sentiment, production expansion, mergers and acquisitions, and convertible bonds, the company expects to achieve operating income of 2.69 billion yuan in 2023, a decrease of about 8%; net profit due to mother is estimated to be about 58.5 million yuan to 87.5 million yuan, a year-on-year decrease of about 87% to 91%; and non-net profit deducted from mother is -125 million yuan to -95 million yuan.
The semiconductor silicon wafer business is temporarily under pressure, and product technology maintains its dominant position: According to SEMI data, global silicon wafer shipments in 2023 were 12.6 billion square inches, down about 14% year on year, and revenue fell by about 11% to US$12.3 billion during the same period. Affected by industry sentiment, the company's silicon wafer business was temporarily under pressure, and the prices of some products were lowered. In addition, some of the company's fund-raising projects have been converted to production since June '22, and fixed costs have increased; 12-inch silicon wafers at the Jiaxing Jinruihong and Quzhou bases are climbing in production capacity, which has had an impact on the company's performance. The company's product technology is leading. 6-inch and 8-inch silicon wafers maintain market share advantages. The 12-inch technical capabilities already cover logic circuits and storage circuits for technology nodes above 14nm, and image sensor devices and power devices for technical nodes required by customers, which helps expand the market size.
Power semiconductor sales have risen, demand for clean energy and automotive electronics is stable: benefiting from stable demand for clean energy and new energy vehicles, the company's semiconductor power device chip sales orders were full in '23, and the capacity utilization rate remained high, and sales volume increased 9% compared to '22. Among them, production and sales of PV bypass diode control chips and automotive-grade power device chips increased dramatically, groove SBD increased rapidly, and newly developed FRD products have increased significantly. The share of production and sales has increased. IGBT products have completed technology development and passed some customer verification and have entered the small-batch shipping stage.
RF chip verification is progressing smoothly, and multi-specification products have begun to be released: the company's RF chip verification process has basically covered mainstream domestic mobile phone chip design customers, and in-hand orders and shipments have increased dramatically over the same period last year. Among them, HBT products account for about 50% of the shipment amount. At the same time, the company's multi-specification, small-batch, multi-purpose, and high-value-added products such as pHEMT, BiHEMT, VCSEL, etc. have begun to be released, and low-orbit satellite customers have already passed verification and begun shipping. In 2023, the company's compound semiconductor capacity utilization rate increased, revenue increased significantly year-on-year, and the negative gross margin situation narrowed.
We forecast that the company's earnings per share for 23-25 will be 0.10, 0.66, and 1.09 yuan, respectively (the original forecast for 23-24 was 1.66/2.29 yuan, which mainly adjusted the revenue, gross margin and expense ratio of the three main businesses). Considering that the localization rate of large silicon wafers is still at a low level and the company has broad room for future growth, we chose the absolute valuation method (FCFF) to give the company a target price of 32.38 yuan to maintain the purchase rating.
Risk warning
Industry sentiment falls short of expectations; downstream demand recovery falls short of expectations; localization progress falls short of expectations; RF product business progress falls short of expectations; capacity investment and construction fall short of expectations.