Key points of investment
2024 Q1 performance: 26% year-on-year increase; expected photovoltaic+semiconductor vacuum pumps to continue to break through 1) Performance: revenue of 750 million yuan, up 8.6% year on year; net profit to mother of 150 million yuan, up 26% year on year.
2) Profitability: gross profit margin 37.1%, up 0.2 pct year on year; net profit margin 19.6%, up 2.6 pct year on year.
3) Orders: As of the end of the first quarter of 2024, the company's contract debt was 340 million yuan, an increase of 69.5% over the previous year.
4) R&D expenses: In 2024, Q1 reached 50 million yuan, up 8.2% year-on-year, accounting for 6.1% of revenue.
2023: Performance increased 34% year on year; high profitability increased, gross margin reached 40.3% 1) Performance: Revenue of 3.85 billion yuan, up 18% year on year; net profit to mother of 870 million yuan, up 34% year on year.
2) Profitability: gross profit margin of 40.3% in 2023, up 4.5 pct year on year; net profit margin 22.5%, up 2.7 pct year on year.
3) Business structure: Compressor revenue in 2023 was 1.95 billion yuan, up 12% year on year, gross profit margin 34.3% (year on year + 2.9 pct); vacuum product revenue was 1.64 billion yuan, up 28.7% year on year, and gross profit margin was 47.9% (year on year +5.3 pct). It is expected that the core benefit is the increase in the photovoltaic vacuum pump industry's growing demand for pumping speed, and the increase in large pump revenue brings about an increase in profitability.
4) Orders: By the end of 2023, contract liabilities reached 330 million yuan, an increase of 137.4% over the previous year.
5) R&D expenses: In 2023, it reached 210 million yuan, up 24.1% year-on-year, accounting for 5.5% of revenue.
Hanzhong Precision Machinery: Compressor leader, photovoltaic+semiconductor vacuum pump opens the second pole of growth 1) Photovoltaic vacuum pump: The company's silicon wafer vacuum pump market share is 70-80%, binding to downstream core long crystal furnace equipment manufacturers (Jingsheng, Jiejia, Microconductor, etc.) + silicon wafer/battery factories (Longji, Central, Tongwei, Tianhe, Jingao, etc.). The company has shipped in batches in the TopCon field of battery vacuum pumps, benefiting from technological iteration in the industry.
2) Semiconductor vacuum pumps: Currently, European, American and Japanese brands account for about 90% of the total market, and there is plenty of room for import substitution. The company is a leader in screw vacuum pumps, and also lays out multi-stage Rustic and rotary vane pumps. (1) Chip factory customers: It has been approved by some domestic chip manufacturers and has begun to supply vacuum pump products in batches, including new production expansion projects and replacement of old vacuum pumps from imported brands.
(2) Equipment manufacturer customers: We have cooperated with many semiconductor equipment companies, and domestic vacuum pumps can be expected to replace imported brand vacuum pumps.
3) Compressors: The company is the leader in domestic compressor equipment. Downstream covers four major fields: compressors for commercial central air conditioning, refrigerated compressors, heat pump compressors, and air compressors, benefiting from macroeconomic recovery.
Profit forecasting and valuation
The company's net profit for 2024-2026 is expected to reach 9.2/10.6/1.24 billion yuan, up 6%/15%/18% year-on-year, corresponding PE 14/12/10 times. Maintain a “buy” rating.
Risk warning: The expansion of downstream photovoltaic production fell short of expectations; progress in semiconductor equipment research and development fell short of expectations.