In 2023, the company achieved positive growth in net profit after deduction. In 2023, the company achieved operating income of 712 million yuan, a year-on-year increase of 7.51%, net profit of 174 million yuan, a year-on-year decrease of 7.57%, and net profit after deducting 150 million yuan, an increase of 0.21% over the previous year. Among them, angular inorganic powder achieved revenue of 233 million yuan, up 0.61% year on year, gross margin decreased by 2.66 percentage points year on year, spherical inorganic powder achieved revenue of 369 million yuan, up 4.19% year on year, and gross margin increased 3.17 percentage points year on year. According to the company's 23rd annual report, citing SIA statistics, global semiconductor industry sales have maintained a month-on-month increase for 8 consecutive months since March 2023. At the same time, the development of AI and other technologies is accelerating the development of advanced packaging materials, high-frequency high-speed substrates, carrier boards, thermal conductive materials, etc., thereby driving demand in the field of upstream materials.
The company continues to improve its product layout, and sales of spherical products continue to increase. According to trends in downstream fields such as EMC, LMC, GMC, UF, electronic circuit substrates, thermal interface materials, etc., the company continues to launch a variety of low CUT point Lowα micron/sub-micron spherical silicon powder, spherical alumina powder, low loss/ultra-low loss spherical silicon powder for high frequency high speed copper clad plates, and micron/sub-micron spherical alumina powder with high thermal conductivity for new energy batteries. The sales volume of the company's spherical products continues to increase.
The company plans to invest about 130 million yuan in the construction project of an ultra-fine spherical powder production line for advanced integrated circuits.
The project has a design capacity of 3,000 tons/year, a construction period of 12 months, and is located in Lianyungang Economic Development Zone. The project investment will continue to meet customer needs in the fields of high-frequency high-speed substrates, IC carriers, and high-end chip packaging materials for 5G communications, and continuously improve the production capacity layout of the company's spherical products.
Profit forecasting and investment ratings. We expect the company's 2024-2026 net profit of 236 million yuan, 295 million yuan, and 357 million yuan, corresponding to EPS of 1.27 yuan, 1.59 yuan and 1.92 yuan, respectively. Referring to the valuations of comparable companies in the same industry, we believe that the company, as a leader in the semiconductor packaging materials segment, has benefited from localized substitution and increased demand for high-end applications. The reasonable valuation is 35-40 times PE in 2024, and the corresponding reasonable value range is 44.45-50.80 yuan, maintaining an superior market rating.
Risk warning: Production expansion projects fall short of expectations; downstream demand falls short of expected risk.