Weak downstream demand and production expansion costs weighed on performance, and net profit to mother fell 42.62% year-on-year in 2023.
The company's revenue in 2023 was 3.190 billion yuan, down 11.39% year on year, net profit to mother was 187 million yuan, down 42.61% year on year, after deducting net profit from non-return to mother - 166 million yuan, which changed from profit to loss year on year. Net profit after deducting net profit from profit to loss declined year-on-year due to downstream demand, and gross margin fell 6.26 pct year-on-year due to the expansion of the company's production.
23Q4 revenue in a single quarter was 800 million yuan, down 1.99% from month to month, net profit to mother was 0.26 million yuan, from profit to loss, net profit after deducting net profit of $103 million; gross profit margin was 9.42%, down 5.66 pct from month to month, net profit margin -3.67%, down 5.20 pct month-on-month. The decline in gross margin was mainly affected by the increase in depreciation expenses and the decline in silicon ASP under the expansion of production.
300mm silicon wafers reached full production and shipment in December '23, and 200mm sales declined year-on-year due to weak demand for mobile phones.
(1) The company's 300mm silicon wafers are mainly produced by its subsidiary Shanghai Xinsheng: 300mm silicon wafer revenue in '23 was 1,379 billion yuan, down 6.55% year on year, gross profit margin was 10.45%, down 1.90 pct year on year, and the average unit price was 469.57 yuan/sheet, down 3% year on year. By the end of '23, the total production capacity of Shanghai Xinsheng 300mm silicon wafers had reached 450,000 wafers/month, and full production was shipped in December '23. The cumulative historical shipment volume was nearly 10 million wafers, and the capacity utilization rate and shipment volume remained stable.
(2) The company's 200mm and below silicon wafers are mainly produced by its subsidiaries Xinao Technology and OKMetic: in '23, the revenue for silicon wafers of 200mm and below was 1,452 billion yuan, down 12.62% year on year, gross profit margin was 17.23%, down 9.22pct year on year, and the average unit price was 412.65 yuan/sheet, up 15% year on year. The decline in gross margin was a significant drop of 24% year-on-year in sales of 200mm and below silicon wafers, which account for a high proportion of fixed costs. By the end of '23, Xinao Technology and OKMetic had a total production capacity of 200mm or less polished wafers/epitaxial wafers exceeding 500,000 wafers/month, and the total production capacity of 200mm and below SOI silicon wafers exceeded 65,000 wafers per month.
The production capacity of 300mm silicon wafers is expected to increase to 600,000 wafers/month by the end of '24, and 200mm specialty silicon wafers are progressing steadily.
By the end of '23, the total production capacity of Xinsheng 300mm silicon wafers in Shanghai had reached 450,000 wafers/month, and is expected to increase to 600,000 wafers/month by the end of '24, and the 300mm semiconductor silicon wafer drawing and polishing production site built in Taiyuan is expected to complete the pilot line construction in '24. Xinao Technology has built a 60,000 pieces/year 300mm high-end silicon-based material test line, and is actively exploring the application market for new energy vehicles and industrial IGBT/FRD products in the epitaxial business; the OKMetic 200mm silicon wafer production expansion project is being built according to plan. New silicon polymerization has completed the construction of a pilot line for piezoelectric film sedimentation materials, and some products have been verified by customers.
Leading domestic silicon wafer companies continue to expand their production capacity and wait for semiconductor demand to recover, maintaining the “gain” rating.
TECHCET expects global silicon wafer shipments to increase 5% year-on-year in 2024 as semiconductor inventory removal and downstream demand recovers. The company is expected to benefit first as a domestic silicon wafer leader. The company's net profit from 2024 to 2026 is estimated to be RMB 2.40/3.19/387 million yuan, respectively, corresponding to PE of 146.1/109.9/90.6 times in 24/25/26, maintaining a “gain” rating.
Risk warning: international trade risks; market competition exacerbates risks; product development risks; business risks, etc.