The 2023 results are in line with the market and our expectations. The 1Q24 results are lower than the market and we expect Wan Ye to release the 2023 annual report: full-year revenue of 2023 of 965 million yuan, YoY -16.67%, net profit to mother of 151 million yuan, YoY -64.32%, net profit after deducting non-return to mother of 77 million yuan, YoY -75.85%, which is basically in line with previous performance forecasts and in line with market and our expectations. Wanye Enterprise released its report for the first quarter of 2024:1Q24 revenue of 99 million yuan, YoY -20.24%, net profit to mother of 0.05 billion yuan, YoY -94.10%, net profit after deducting non-return to mother of 13 million yuan, YoY +0.72%. It fell short of the market and our expectations, and we think it was mainly due to seasonal fluctuations in revenue due to the pace of sales.
Development trends
In 2023, the company's real estate sector revenue was 548 million yuan, YoY -39.03%. It was mainly affected by trends in the Chinese real estate market and the company's sales pace. The gross profit margin was 66.51%, which was relatively little change. The company's 1Q24 gross profit margin was 77.27%. Based on this, we estimate that the company's revenue for the single quarter was mainly brought by real estate.
In 2023, the company's manufacturing sector revenue was 346 million yuan, YoY +67.53%, gross profit margin 18.01%, YOY-1.73ppt. Among them, Kaishitong's revenue was 231 million yuan, YoY +65.1%. We think it was mainly driven by Beijing Logic customer's production expansion and recovery. We think it mainly came from this major customer, with net profit of 185 million yuan; Jiaxin Semiconductor's revenue of 118 million yuan, YoY +77.8%, rapid start-up, gross profit margin of -5.71% (see Wanye Zhejiang gross profit margin), and net profit of -34 million yuan. The company's manufacturing sector currently has poor financial performance due to low revenue and high production capacity/R&D investment, but we believe that 2H23 Logic customers are expected to resume picking up goods and continue to develop new customers to establish higher growth in 2024.
Casteon develops applications and customers in various fields such as logic, storage, and power CIS. Based on existing platforms and foundations, the company develops a full range of ion implanter products, including large beam injectors for CIS, medium beam displacer, hydrogen ion large beam injector, and high-temperature ion implanters for SiC. In March 2024, the company delivered the first large beam ion injector for the CIS to the customer.
Meanwhile, in 2023, the company opened up a number of new 12-inch fab customers. The 1Q24 company shipped 8 sets of ion implanter equipment to a number of repeat order customers, and added several new customer orders in April. Since 2023, the total number of new orders has exceeded 270 million yuan. Jiaxin Semiconductor signed a new order of more than 130 million yuan.
Profit forecasting and valuation
We raised our future outlook for Casteon and slightly lowered our future outlook for Compart System. Considering that the first quarter's performance fell short of expectations and the company's 2024/2025 forecast remained unchanged, the company's 2024/2025 revenue is expected to be +34%/20% YoY of 2024/2025 to reach 1,290/15.52 billion yuan, and net profit of 148/210 million yuan. Using the SOTP method to value the company (see text for details), the company's target price was raised by 5% to 12.98 yuan, with 5% room to rise, keeping the company's rating of outperforming the industry.
risks
Fab capital expenditure falls short of expectations, product expansion falls short of expectations, and new product development falls short of expectations.