Incidents:
1. The company released its 2023 annual report. In 2023, it achieved revenue of 2,508 billion yuan, an increase of 52.11% over the previous year; realized net profit attributable to owners of the parent company of 724 million yuan, an increase of 44.29% over the previous year; and realized net profit without deduction of 608 million yuan, an increase of 60.05% over the previous year.
2. Looking at Q4's single-quarter results, we achieved revenue of 668 million yuan, up 29.54% year on year and 10.21% month on month; realized net profit attributable to owners of the parent company of 160 million yuan, up 0.70% year on year and a decrease of 15.81% month on month; realized net profit without return to mother of 149 million yuan, an increase of 30.98% year on year and a decrease of 1.91% month on month.
3. The company released its report for the first quarter of 2024. 2024Q1 achieved revenue of 680 million yuan, up 10.40% year on year and 1.88% month on month; realized net profit attributable to owners of the parent company of 202 million yuan, up 4.27% year on year and 26.49% month on month; realized net profit without return to mother of 172 million yuan, up 2.78% year on year and 15.36% month on month.
Significant year-on-year increase in results in '23:
The company achieved operating revenue of 2,508 billion yuan in 2023, up 52.11% year on year, of which sales revenue of CMP equipment was 2,278 billion yuan, up 59.20% year on year; revenue from other business such as wafer regeneration, key consumables and maintenance services was 230 million yuan, up 5.55% year on year, mainly benefiting from the rapid advancement of domestic semiconductor equipment replacement in major domestic fabs. The company is a leading domestic CMP equipment company, and its share increased rapidly. In terms of profitability, in 2023, the company's net profit to mother increased by 44.29% year on year, net profit after deducting non-return to mother increased 60.05% year on year, gross sales margin and net interest rate were 46.02% and 24.25% respectively, which was close to the same level year on year. Looking at 24Q1, the company's revenue and net profit to mother both increased year over year, and gross margin and net profit margin remained stable compared to the same period last year.
The competitive advantage of CMP equipment continues to be strengthened, and new product development and verification are progressing smoothly:
In terms of CMP equipment, the company's competitive advantage continues to improve. On the new model, the company launched the Universal H300 machine. Through innovative polishing system architecture design and optimized cleaning technology modules, the technical performance of the whole machine has been greatly improved, and the applicable processes are more flexible and rich. The first machine has been sent to the client for verification, and small-batch verification of multiple processes has been completed. It is progressing smoothly, and mass production is expected to be achieved in 2024. In terms of thinning equipment, the company developed the Versatile-GP300 all-in-one thinning and polishing machine, which is mainly suitable for advanced packaging and backside thinning processes in front-end wafer manufacturing to meet 3D IC's integrated process requirements for ultra-precision grinding, CMP and cleaning, and has been successfully verified on the client side. In terms of chipping equipment, the company has developed 12-inch wafer edge cutting equipment that satisfies manufacturing processes such as integrated circuits and advanced packaging, and has already been sent to a leading storage manufacturer for verification in the first half of 2024. In film thickness measuring equipment, the company's film thickness measuring equipment used in metal processes such as Cu, Al, W, and Co has been sent to many customers for verification. The measurement accuracy is high, the results are reliable and accurate, and small-batch shipments have been achieved, and some machines have passed the inspection.
Investment advice:
We expect the company's revenue from 2024 to 2026 to be RMB 3,511 billion, RMB 4.565 billion, RMB 5.478 billion, and net profit to mother of RMB 1,012 billion, RMB 1,393 billion, and RMB 1,444 billion respectively. Considering the acceleration of domestic substitution in the semiconductor device special equipment manufacturing industry, the company is developing new products smoothly. The company was given a valuation of PE35.00X in 2024, corresponding to a target price of 222.95 yuan. Give it a “buy-A” investment rating.
Risk warning:
The risk of new technologies, new processes, and new products not being industrialized as scheduled, the risk of industry and market fluctuations, the risk of international trade friction, and the risk of rising product production costs.