Key points of investment
FY23&24Q1 performance exceeded expectations, and net profit increased 124%/30% year-on-year respectively in '23 and 24Q1
In 2023, the company achieved revenue of 4.446 billion yuan, a year-on-year increase of 51.76%; net profit to mother was 687 million yuan, an increase of 123.72% over the previous year. The 24Q1 company achieved revenue of 774 million yuan, an increase of 8.26% over the previous year, and realized net profit of 94 million yuan, an increase of 30.08% over the previous year. We believe that the company has accumulated a deep reputation and stable customer relationships in the fields of consumer electronics, semiconductors, etc., and is expected to continue to receive high-quality orders in the future, leading to continued growth in performance.
The consumer electronics market recovered and demand for new generations increased, and the company's consumer electronics business continued to benefit from 23Q4. The consumer electronics market began to recover. Global smartphone shipments were 324 million units, up 7.8% year on year and 6.7% month-on-month. IDC predicts that smartphones are expected to grow positively in 24, reaching 1,519 million units in 25.
The consumer electronics sector is the company's core business area. The company is deeply tied to its core customers. The company's intelligent manufacturing equipment basically covers terminal products such as mobile phones, tablets, headphones, watches, and audio. Currently, the company's intelligent manufacturing equipment is not only used in the assembly and inspection process of the entire terminal product, but has also been extended vertically to the assembly and inspection of front-end module sections and components. With the recovery of the consumer electronics market and the demand for equipment replacement generated by product iterations, the company's consumer electronics-related business is expected to continue to benefit.
Demand for HBM equipment is growing rapidly. The company's semiconductor measurement equipment business is expected to grow rapidly, AI waves will rise, demand for semiconductors in computing power and storage will explode, and demand for high-end semiconductor equipment in segments such as HBM will grow rapidly. According to semiconductor industry observations, Samsung said that Samsung's HBMCAPEX increased more than 2.5 times in '24, and is expected to maintain this level of growth in '25, so there is huge room for development in the HBM upstream equipment industry chain.
The company entered the field of wafer inspection and measurement equipment through the acquisition of Japan's OPTIMA, the world's leading supplier of wafer inspection equipment. Since the acquisition, the company has efficiently completed technology integration, continued to expand the equipment product line in the field of high-end semiconductors and applications in emerging fields such as HBM, and focused on increasing the value of individual devices. Through the “global technology+Chinese market” strategy, the company's wafer inspection and measurement equipment is rapidly opening up space in the domestic market, and the company's related business is expected to grow rapidly.
Profit forecasting and valuation
We expect the company's 2024-2026 revenue to be $52.1, 60.0 billion yuan, and 6.79 billion yuan respectively, with year-on-year growth rates of 17.2%, 15.1%, and 13.2% respectively; net profit to mother will be 8.5, 10.0, and 1.2 billion yuan, respectively, with year-on-year growth rates of 23.6%, 17.5%, and 20.2%, respectively. Corresponding PE is 18, 15, and 13 times, respectively, maintaining a “buy” rating.
Risk warning
Consumer electronics industry recovery falls short of expectations, semiconductor equipment expansion falls short of expectations, etc.