Event Overview: On April 27, Huahai Qingke released its 2023 annual report and 2024 quarterly report. The company achieved revenue of 2,508 billion yuan in 2023, an increase of 52.11% over the previous year; realized net profit of 724 million yuan, an increase of 44.29% over the previous year; and realized deducted non-net profit of 608 million yuan, an increase of 60.05% over the previous year. In 2024, Q1 achieved revenue of 680 million yuan, an increase of 10.40% over the previous year; achieved net profit due to mother of 202 million yuan, an increase of 4.27% year on year; realized deducted non-net profit of 172 million yuan, an increase of 2.78% year on year.
Revenue and profit increased significantly year over year in 2023. The company is a leader in localization in the field of CMP equipment, benefiting from the increase in demand for semiconductor equipment from major domestic fabs. At the same time, the company continues to increase investment in product research and development, continuously optimize the product structure, and continuously enhance the competitiveness of the company's products. It has maintained a high revenue and profit growth trend throughout 2023. The company's revenue for the full year of 2023 was 2.508 billion yuan. Among them, CMP equipment revenue was 2,278 billion yuan, up about 59.20% year on year, and revenue from other businesses such as wafer recycling, key consumables and maintenance services was 230 million yuan, up about 5.55% year on year. In 2023, the comprehensive gross margin reached 46.02%, a year-on-year decrease of 1.70 pct. Among them, the gross profit margin of CMP equipment was 46.02%, a year-on-year decrease of 1.63 pct, and the gross profit margin of other businesses was 45.98%, a year-on-year decrease of 2.24 pcts. The 2024Q1 company's consolidated gross profit margin was 47.92%.
Multiple categories are being developed in parallel, and the new product matrix is gradually unfolding.
1) In terms of thinning equipment, mass production machines for advanced packaging have received orders from leading companies in various fields, and the 12-inch wafer thinning and coating all-in-one machine has obtained a demo order from a leading integrated circuit packaging test leader.
2) In terms of cleaning equipment, the first 12-inch single-chip cleaning machine was sent to a large silicon wafer company for verification. The cleaning machine used to clean the front, back and edge of the 12-inch integrated circuit FEOL/BEOL wafer was assembled. The brush cleaning equipment for 4/6/8-inch compound semiconductors is being verified, and the 4/6/8/12 inch chip box cleaning equipment has been delivered to the wafer re-production line for verification.
3) In terms of liquid supply systems, the company's grinding liquid and cleaning liquid supply systems for wet processes have been purchased in batches by customers and introduced to customers from manufacturers such as logic and advanced packaging; 4) In terms of film thickness equipment, the company's metal film thickness measuring equipment has been sent to many customers for verification to achieve small-batch shipment, and some machines have passed inspection.
Actively invest in industries and enhance industrial collaboration. In 2023, the company participated in the establishment of Shanghai Gimpo Venture Capital and Wuxi Huahai Gimpo Venture Capital to enhance synergy in the semiconductor industry. Complete equity investment in Zhejiang Xinyu and expand the layout of the ion implantation equipment circuit.
Investment advice: We expect the company's revenue for 2024-2026 to be 33.59/41.48/5.221 billion yuan, respectively, and net profit to mother of 9.07/11.41/1,468 billion yuan respectively. Corresponding to the current price of PE in 2024-2026 is 28/23/18 times. We are optimistic about the company's leading edge and product line expansion in the CMP process, and maintain the “recommended” rating.
Risk warning: Product verification falls short of expectations; cyclical industry fluctuations; fund-raising projects fall short of expectations.