Key points of investment:
Incident: The company released its 2023 annual report and 2024 quarterly report, in line with expectations. The company's revenue in 2023 was 891 million yuan, up 75.0% year on year, net profit after deducting net profit of 3.69 million yuan (2022 - 87.85 million), and net profit from mother was 140 million yuan, up 1072% year on year; in the first quarter of 2024, the company achieved revenue of 236 million yuan, up 45.6% year on year, after deducting net profit of 7.78 million yuan (same period last year - 790,000), net profit to mother of 34.24 million, up 9.2% year on year.
The number of orders for the company's main product models increased steadily, and 1Q24 contract liabilities rebounded. By the end of 2023, the company had produced and delivered nearly 300 non-graphic wafer defect inspection equipment, more than 200 graphic wafer defect detection equipment, and nearly 150 three-dimensional morphology measurement equipment, covering more than 100 customer production lines. At the same time, the company had achieved mass sales of the printing accuracy measurement equipment. As of the end of March 2024, the company's contract debt was 478 million yuan, an increase of 38 million over the beginning of the year. It is expected that the company's new orders will continue to grow in the first quarter of 2024.
The development of brightfield and darkfield nanoscale testing equipment is progressing smoothly, promoting customer production line verification. The nanoscale brightfield graphic wafer defect detection equipment independently developed by the company has now completed equipment prototype development for logic chips, memory chips, etc., and has been shipped in small batches to many leading domestic customer production lines for process development and application verification work, and is currently progressing smoothly; nanoscale dark field graphic wafer defect detection equipment uses deep UV laser dark field scanning and imaging detection technology, and has now also completed equipment prototype development. It is actively developing various complex graphics process samples from many mainstream domestic customers, including logic, storage, power, 2.5D HH chips, etc. Verification tests.
The localization rate of testing and measurement equipment is extremely low, and there is huge room for domestic replacement. According to the company's annual report, the semiconductor inspection and measurement equipment market in mainland China was US$4.20 billion (approximately RMB 29.1 billion) in 2022, with a year-on-year increase of 36%, and is expected to grow further in 2023; the company's revenue of 890 million in 2023 accounts for about 3.0% of the inspection and measurement equipment market size. It is estimated that the company's revenue share in 2023 will be less than 3%, reflecting the extremely low overall localization rate of domestic testing and measurement equipment, and the rapid increase in market share is expected to continue in the future.
Investment analysis opinion: Raise profit forecasts and maintain the “gain” rating. It is expected that under the trend of autonomous and controllable industrial chains, Zhongke Fei Test will maintain the trend of rapidly increasing market share. At the same time, product categories will continue to increase due to continuous breakthroughs in technology research and development. It is expected that the rapid growth in the company's performance is expected to continue, raise the company's 2024-2025 performance forecast, and add a new 26-year performance forecast. The company's revenue for 2024-2026 is estimated to be 13.8 billion yuan, 1.88 billion yuan, and 2.39 billion yuan respectively (the original forecast was 11.9 billion yuan and 1.68 billion yuan from 2024 to 2025), with year-on-year growth rates of 54.78%, 36.2%, and 27.4%, respectively. The company's net profit from 2024 to 2026 is 1.95, 274 million yuan, and 348 million yuan, respectively (the original forecast was 1.44 billion yuan and 197 million yuan from 2024 to 2025).
Risk warning: Lower demand affects the pace of production expansion in fabs; equipment verification results fall short of expectations; risk of lengthening raw material procurement cycles.