The company achieved steady year-on-year growth in net profit after deduction in 2023 and 2024Q1. The company's pan-semiconductor business achieved rapid growth in 2023, advanced packaging equipment expanded smoothly, and other pan-semiconductor fields were also fully expanded.
The implementation of the company's high-end PCB equipment+internationalization+major customer strategy has been very effective. Maintain a buy rating.
Key points to support ratings
Net profit after deducting non-return to mother achieved steady growth. In 2023, Chipboard achieved operating revenue of 829 million yuan, YoY +27%; gross profit margin of 42.6%, YoY 0.5pcts; net profit after deducting non-return to mother of 158 million yuan, YoY +36%.
2024Q1 Chipset achieved operating income of 198 million yuan, YoY +26%; gross profit margin of 43.9%, QoQ+1.6 pcts, YoY 0.3 pcts; net profit after deducting non-return to mother of 37 million yuan, YoY +28%. Chipper achieved steady growth in net profit not attributable to mother after micro-deduction.
The pan-semiconductor business is growing at an impressive rate. In 2023, Chipboard achieved pan-semiconductor business revenue of 188 million yuan, YoY +97%, 54 pan-semiconductor equipment shipments, YoY +86%; PCB business revenue of 590 million yuan, YoY +12%, PCB equipment shipments of 280 units, and YoY +13%. Chipset's microchip pan-semiconductor business achieved rapid growth.
Advanced packaging equipment is progressing smoothly, and the field of pan-semiconductors is expanding comprehensively. Direct writing lithography equipment and Huatian Technology and Shaoxing Changdian cooperated smoothly in the field of advanced packaging, and received repeated orders from leading advanced packaging customers. The ABF carrier board equipment MAS4 achieved a fine line width of 4 μm, reaching the same level as world-class competitors. The LDW series of masking devices reached the 90nm process node and was sent to the client for verification. The new display device NEX-W enters the customer supply chain. Lead frame equipment is also actively being industrialized.
The strategy of high-end PCB equipment+internationalization+big customer has been very effective. Chipboard Micropack focuses on high-end circuit boards such as HDI boards, large MLB boards, and carrier-like boards, and actively matches the market trend of PCB shifting to Southeast Asia. The company opened up the Japanese market through NEX60T dual-surface anti-welding DI equipment, and continued to deepen cooperation with customers such as Shengyi Electronics, Shenghong Technology, Dingying Electronics, Shanghai Electric Power Co., Ltd., Shennan Circuit, and Red Board.
The dividend shows the company's confidence in steady profits. According to the 2023 annual report, the company decided to distribute a total cash dividend of about 105 million yuan, accounting for about 58% of net profit returned to mother in 2023. This is also the second time since 2021 that the company has paid a cash dividend. The dividend ratio of up to 58% shows to a certain extent the company's confidence in steady profits in the future.
valuations
Chipboard's 2024/2025/2026 EPS is expected to be 1.87/2.37/2.73 yuan respectively. As of the close of trading on April 24, 2024, Chipboard's total market value was 7.67 billion yuan, corresponding to 2024/2025/2026 PE, 31.2/24.6/21.4 times, respectively.
We expect the 2024 Chipboard Micropackage order in the field of advanced packaging to enter the implementation period, and there will be a certain acceptance cycle from order execution to conversion into revenue, which will affect the company's 2023 Advanced Packaging revenue recognition process. We cut the company's profit for 2024/2025. Maintain a buy rating.
The main risks faced by ratings
Demand falls short of expectations. Verification is not progressing as expected. The competitive landscape has deteriorated. Product prices are declining.