occurrences
The company released its 2023 annual report. According to the announcement, the company achieved revenue of 2,667 billion yuan, a year-on-year decrease of 2%; realized net profit to mother of 222 million yuan, a year-on-year decrease of 43.08%; realized deducted non-net profit of 164 million yuan, a year-on-year decrease of 52.79%; gross profit margin of 36.95%, and a net profit margin of 10.79%.
In 23Q4, the company achieved revenue of 795 million yuan in a single quarter, up 3.72% year on year and 11.50% month on month; achieved net profit of 0.46 million yuan, down 51.99% year on year and 42.50% month on month; realized net profit deducted from single quarter of 35 million yuan, down 55.63% year on year and 42.62% month on month; gross profit margin of 39.70%, up 0.76 pct month on month, net profit margin of 8.63%.
The increase in R&D investment, compounded by exchange rate fluctuations, had an impact on the company's revenue in '23, which fell 2% year on year. If the scope of consolidated statements were excluded to reduce the impact of the revenue factors of Zhuhai Tianyi, the company's revenue remained basically flat year over year. The main reasons for the year-on-year decline in net profit due to the year-on-year decline in the company's net profit due to increased investment in R&D expenses, affecting net profit to the mother decreased by 31 million yuan; ② the construction of Xiantao Industrial Park affected the increase in bank loan interest expenses and the year-on-year decline in exchange exchange income due to exchange rate fluctuations. The two factors combined affected the net profit to the mother decreased by about 30 million yuan; ③ the long-term equity investment income of participating companies according to the equity method decreased by 23 million yuan; ④ Qijie Technology's implementation of employee shareholding plans affected changes in equity and incentive share confirmation costs in Beihai Xun ① The net profit attributable to the mother fell by about 12 million yuan year-on-year due to the new three-board intermediary expenses.
CMP polishing pads are recovering well. The amount of CMP polishing liquid and cleaning liquid released smoothly. The company's CMP polishing pad business resumed quarterly in 23 years. 23Q4 achieved revenue of 149 million yuan in a single quarter, up 49.21% year on year and 25.68% month on month, setting a record high in revenue in a single quarter, showing a clear recovery and growth trend quarter by quarter. Furthermore, the company continues to make breakthroughs in the autonomy of raw materials for polishing pads. Self-made CMP polishing pads have completed pilot work with microspheres, and industrial construction has begun. In the future, it will fully self-produce the three major raw materials of CMP polishing pads (prepolymers, microspheres, and cushions). In terms of CMP polishing liquid and cleaning solution, the company continued to promote it in the market. In the 23Q4 single quarter, revenue was about 29 million yuan, up 294.61% year on year, up 32.96% month on month, and entered a stage of rapid growth.
Sales of semiconductor display materials have increased significantly, and the high-end wafer photoresist business is rapidly advancing, and the company's layout in the field of key materials for OLED displays is becoming more and more perfect. 23Q4 achieved revenue of 67 million yuan, an increase of 174.86% year on year and 17.46% month on month. The trend of stable volume is obvious. At present, the company has become the first supplier of YPI and PSPI products to some mainstream domestic panel customers, established a leading position in domestic supply of YPI and PSPI products, and the system capacity for large-scale production continues to improve. In addition, the company's film packaging material TFE-INK has passed the certification of major downstream customers and obtained batch orders in 23Q4. In terms of high-end wafer photoresists, the company has now deployed 16 mainstream wafer photoresists that have yet to break through in China, including 8 high-end KrF photoresists and 8 submersible ArF photoresists, all of which are models voluntarily commissioned by customers, and have completed customer samples for 7 products. In terms of advanced packaging materials, the company's packaging PI and temporary adhesive products are progressing smoothly on the client side.
Investment advice
We expect the company's net profit to be 429/575/697 million yuan from 2024 to 2026, respectively, and the corresponding PE is 46.02/34.36/28.33 times, maintaining the “buy” rating.
Risk warning
Downstream demand recovery fell short of expectations, new product launch progress fell short of expectations, and market competition intensified.