Key points of investment

Incident: Recently, battery equipment independently developed by Jingshengji Electronics Company Zhejiang Jingsheng Photonics Technology Co., Ltd. was successfully exported to overseas customers.

The subsidiary Jingsheng Photonics received an overseas order for battery coating equipment. On October 8, 2023, Jingsheng Electromechanical established a holding subsidiary Zhejiang Jingsheng Photonics Technology Co., Ltd. (80% of Jingsheng Mechatronics and 20% of Hangzhou Honghao Enterprise Management Partnership), which is responsible for the photovoltaic cell equipment business, mainly developing tubular PECVD, LPCVD, diffusion and annealing, and various solar cell process equipment such as single-chamber multi-boat ALD and dry boat cleaning. The equipment performance has reached or surpassed the same products in the industry. Jingsheng Photon's overseas products include PECVD, LPCVD, and the three latest equipment for tubular low-pressure phosphorus diffusion furnaces. Among them, the unique filament furnace design of the PECVD equipment makes the efficiency distribution more convergent; the heat field distribution in the LPCVD equipment chamber is more uniform, and the uniformity of the Poly-Si deposition film thickness exceeds the industry level; the tubular low pressure phosphorus diffusion furnace innovatively uses designs such as independent flange water cooling, which further improves heat management and airflow control capabilities.

Jingsheng Electromechanical forms an integrated layout of photovoltaic silicon wafers, cells, and module equipment. As the leader of the monocrystalline furnace, the silicon wafer end company is expected to lead the next technology iteration. The subsidiary Huixiang Electrohydraulic (65% of Jingsheng electromechanical holding ratio) is responsible for superconducting magnetic field production; the battery terminal company established Jingsheng Photon (80% of Jingsheng electromechanical holding ratio) to be responsible for TopCon equipment; the component end developed a component equipment production line with multiple processes such as tile welding machines, plate pouring machines, automatic frame feeders, and glue filling detectors.

Jingsheng semiconductor equipment positions large silicon wafers, advanced packaging, advanced manufacturing processes, and silicon carbide. (1) Large silicon wafer equipment: Jingsheng is the leading domestic long crystal equipment, which can provide overall solutions for long crystal, slicing, grinding and polishing; (2) advanced packaging: thinning machines have been arranged; (3) advanced manufacturing processes: 8-12 inch pressure-reduced silicon epitaxial equipment, LPCVD and ALD equipment; (4) silicon carbide epitaxial equipment: developed 6-8 inch silicon carbide long crystal equipment, slicing equipment, thinning equipment, polishing equipment and epitaxial equipment, 8-12 inch atmospheric pressure silicon epitaxial equipment, etc. Silicon epitaxial equipment.

Material: layout silicon carbide substrate & quartz crucible & diamond wire. (1) Silicon carbide substrates: 8-inch silicon carbide substrates have been mass-produced; (2) quartz crucibles: accelerate the increase in production capacity of crucibles and continue to develop high-quality super crucibles; (3) Diamond wire: the first phase of the mass production project was put into operation and mass sales were achieved, promoting the second phase of the production expansion project and speeding up the development of tungsten wire.

Profit prediction and investment rating: Photovoltaic equipment is the first curve for Jingsheng's electromechanical growth. The second curve is the volume of photovoltaic consumables and semiconductor consumables, and the third curve is the volume of silicon carbide equipment+ materials and semiconductor equipment. We maintained the company's 2024-2026 net profit of 56/65/73 billion yuan, corresponding PE of 7/6/5 times, and maintained a “buy” rating.

Risk warning: Downstream production expansion falls short of expectations, and new product expansion falls short of expectations.