Incidents:
1. The company released its 2023 annual report. In 2023, it achieved revenue of 3.151 billion yuan, an increase of 3.33% over the previous year; realized net profit attributable to owners of the parent company of 377 million yuan, an increase of 33.58% over the previous year; and realized net profit without deduction of 102 million yuan, a year-on-year decrease of 64.25%.
2. Judging from the Q4 single-quarter results, we achieved revenue of 952 million yuan, a year-on-year decrease of 15.27% and a year-on-month increase of 32.47%; realized net profit attributable to owners of the parent company of 181 million yuan, an increase of 51.29% year-on-year and an increase of 107.49% month-on-month; and realized net profit without return to mother of -49 million yuan.
3. The company released its report for the first quarter of 2024. 2024Q1 achieved revenue of 811 million yuan, an increase of 3.48% year on year and a decrease of 14.80% month on month; realized net profit attributable to owners of the parent company of 64 million yuan, an increase of 1.45% year on year and a decrease of 64.91% month on month; realized net profit without deduction of 63 million yuan, an increase of 8.64% year on year.
Revenue increased slightly year over year in '23, and new orders increased significantly:
The company achieved revenue of $3.151 billion in 2023, up 3.33% year on year, of which pan-semiconductor revenue was $2,843 million, up 5.37% year on year; biotech and pharmaceutical revenue was 302 million yuan, down 13.00% year on year. From an order perspective, the total number of new orders added by the company during the reporting period was 13.293 billion yuan, an increase of 215.1% over the previous year, including long-term orders of 5 to 15 years for electronic materials and special services of 8.661 billion yuan. The acquisition of this part of the long-term order was an initial reflection and result of the company's business strategy of “turning technology and products into services” in the middle of the company's business strategy. In terms of profitability, the company's net profit to mother increased by 33.58% year on year in 2023, and net profit after deducting non-return to mother decreased by 64.25% year on year, mainly affected by financial costs, depreciation expenses, and short-term losses in the business that is still climbing.
Semiconductor cleaning equipment is fully covered, and high-end products continue to break through:
The company's subsidiary Zhi Wei Technology is one of the main suppliers of wet process equipment in China, and can cover market needs in various segments of wafer manufacturing, including logic circuits, high-density storage, and characteristic processes for compound semiconductors. At present, all development of wet process equipment at 28 nm nodes has been completed, and orders have been placed for all process machines. At more advanced process nodes, even some process orders have been obtained. In addition, the company's high-end products, including SPM high-temperature sulfuric acid, glue removal, crystal back cleaning and other cleaning equipment, have made breakthroughs and delivered to many mainstream domestic fabs.
Investment advice:
We expect the company's revenue from 2024 to 2026 to be 4.189 billion yuan, 5.236 billion yuan, and 6.022 billion yuan, respectively, and net profit to mother of 555 million yuan, 704 million yuan, and 956 million yuan, respectively. Considering the recovery of the semiconductor industry and the acceleration of domestic replacement of semiconductor quantity testing equipment, the company's new product development is going smoothly. The company was given a valuation of PE25.00X in 2024, corresponding to a target price of 36 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.