Incident Overview
The company released its 2023 annual report and 2024 quarterly report.
Demand for back-end packaging and small size was sluggish, and the Q1 revenue side was under short-term pressure. In 2023, the company achieved operating revenue of 1,717 billion yuan, +23.98% year over year, of which Q4 was 510 million yuan, +4.57% year over year, and growth slowed. By business: 1) Lithography process gluing and imaging equipment: Achieved revenue of 1,066 billion yuan in 2023, +40.80% over the same period. We judge that the front track achieved significant growth, and the back packaging and compound semiconductor tracks are under pressure in the short term. 2) Single-piece wet equipment: Achieved revenue of 600 million yuan in 2023, +9.09% year-on-year, mainly driven by increased revenue from cleaning machines and glue removers. 3) Other equipment: Achieved revenue of 13.3 million yuan in 2023, -74.96% year-on-year.
2024Q1 achieved revenue of 244 million yuan, -15.27% year-on-year, under pressure in the short term. Looking at the downstream segment, we judge that the forward track continues to grow rapidly, and demand in the back-end packaging and compound semiconductor sectors is still sluggish. The company's orders in 2023 were basically the same year on year. By the end of 2023, the company had orders of about 2.2 billion yuan (tax included). As of the end of 2024Q1, the company's contractual liabilities and inventory were $414 million and 1,777 million, respectively, +10% and +9%, respectively. With on-hand orders being delivered and revenue confirmed, the company's 2024 revenue side performance is expected to improve marginally quarter by quarter and return to rapid growth.
The expense ratio increased markedly during the period, and the Q1 profit level declined markedly. The company's net profit to mother and net profit after deducting non-return to mother in 2023 were 2.51 million yuan and 187 million yuan, respectively, +25.21% and +36.37%, respectively. The net sales interest rate and net profit margin after deducting non-sales in 2023 were 14.57% and 10.90%, respectively, compared with +0.12 and +0.99 pct, respectively. The profit level increased. 1) Margin side: The gross margin of sales in 2023 was 42.53%, +4.13pct, a significant increase. Among them, the gross margins of glued imaging equipment and single-chip wet processing equipment were 38.84% and 46.37%, respectively, +4.19 and +7.20pct, respectively. We judge that this is mainly due to cost reduction in component localization and product structure optimization. 2) Expense side: The cost rate for the 2023 period was 30.79%, +1.78pct year over year, suppressing profit side performance to a certain extent. Among them, sales, management, R&D, and financial expense ratios were +0.77, +0.36, +0.53, and +0.10pct, respectively.
2024Q1's net profit attributable to mother and net profit after deduction was RMB 1,601 and 8.63 million yuan, respectively, or -75.73% and -84.90% year-on-year, respectively. The 2024Q1 net sales margin and net profit margin after deducting non-sales were 6.40% and 3.53%, respectively, year-on-year, -16.49 and -16.30pct, respectively. The profit level declined markedly. 2024Q1 gross sales margin and period expense ratio were 40.30% and 45.79%, respectively, -5.01 and +13.91 pct year-on-year, respectively.
Qiandao gluing equipment continues to break through, and the product system continues to expand rapidly. While stabilizing its leading position in glued imaging equipment, the company continues to expand from the back road to the frontier field, and at the same time continues to expand equipment such as cleaning, bonding, and paving, to continue to improve the product system and open up room for growth. 1) Glue-coated imaging equipment: While stabilizing competitiveness in the advanced packaging market, the company focuses on increasing investment in the future market. It has successfully launched offline, i-Line, KrF and ArF submersible models. The submersible machine has received orders from 5 important domestic customers, and domestic replacement is expected to accelerate. 2) Cleaning equipment: The company's physical cleaning machine has become the main production model for domestic logic and power device customers, and a new generation of high-capacity physical cleaning machines has been sent to important domestic storage customers for verification. On the basis of physical cleaning machines, the company strategically lays out chemical cleaning machines with a larger market scale, and has received verification orders from important domestic customers. 3) Bonding equipment: In response to advanced packaging requirements, the company has forward-looking layout of temporary bonding and unbonding equipment. It has successively received orders from many leading customers and entered the small-batch sales stage. In addition, the company also released an all-in-one SiC chipping machine. Compared with the grinding wheel cutting process, production capacity efficiency has been greatly improved, further improving the company's product layout in the small-size field.
Investment advice
We expect 2024-2026 revenue to be 21.22, 28.03, and 3.778 billion yuan, respectively, +24%, +32%, and +35% year-on-year net profit for 2024-2026 will be 3.15, 4.12, and 556 million yuan, respectively, +26%, +31%, and +35%. EPS for 2024-2026 will be 2.29, 2.99, and 4.03 yuan, respectively. The 2024/5/14 stock price of 88.65 yuan corresponds to 39, 30 and 22 times PE, for the first time Coverage gives a “gain” rating.
Risk warning
The semiconductor industry is declining, new product expansion falls short of expectations, etc.