Two-wheel drive development strategy. Jingzhida insists on implementing a two-wheel drive development strategy for the new display device testing equipment business and the semiconductor memory testing equipment business. (1) New display device inspection solutions, mainly used for inspection and calibration of various functions such as optical characteristics, display defects, and electrical characteristics of cell and module processes of new display devices such as AMOLED, TFT-LCD, and micro displays, including optical inspection and correction systems, aging systems, signal generators and inspection system accessories; (2). Semiconductor memory device testing solutions, mainly including memory wafer test systems, memory aging repair systems, memory packaging test systems, and other test accessories.

Profitability increased rapidly in 2023. The company achieved revenue of 0.649 billion yuan in 2023, an increase of 28.53% year on year; net profit after deducting non-return to mother was 84.3467 million yuan, an increase of 60.24% year on year. Among them, the main business revenue by industry: (1), new display device testing revenue was 0.565 billion yuan, up 27.33% year on year, gross profit margin was 42.32%, up 5.05 pct year on year; (2) semiconductor memory device test revenue was 82.9192 million yuan, up 45.52% year on year, gross profit margin 26.84%, down 3.28 pct year on year. 24Q1 achieved revenue of 83.047 million yuan, a year-on-year increase of 62.25%; net profit after deducting non-return to mother - 18.2012 million yuan.

Optical inspection, correction and repair systems are the main products contributing to revenue. The new display device inspection business can be subdivided into five major blocks: optical inspection and correction and repair systems, aging systems, touch detection systems, signal generators, and inspection system accessories. Among them, optical inspection and correction systems are the main products contributing revenue to new display device inspection. Revenue was 0.46 billion yuan in 2023, an increase of 82.03% over the previous year. The revenue share in the inspection of new display devices was 81.42%, and the gross profit margin was 38.54%; aging systems accounted for 69.2106 million yuan of revenue in new display device testing 12.26%, gross profit margin 56.84%.

Development of wafer testing machines and FT testers is progressing according to plan. In the semiconductor memory testing equipment business, the company's probe card products, aging repair equipment, and aging repair jig boards have all been verified by major domestic semiconductor memory device manufacturers and have achieved mass sales performance. It has now become its second supplier. Currently, it is steadily promoting the localization of aging repair equipment, aging repair jig boards, and core components of probe cards.

The development of the wafer tester and FT tester is progressing according to plan. Among them, the prototype verification work for the wafer tester is nearing completion. The 9Gbps high-speed interface ASIC chip used in the FT tester has entered the engineering flow stage, solidifying the key supply chain foundation for subsequent wafer testers covering next-generation memory devices such as HBM.

Profit forecasting and investment advice. We estimate that Jingzhida's 2024E-2026E revenue will be 0.883 billion yuan, 1.181 billion yuan, and 1.605 billion yuan, respectively, and net profit to mother 0.143 billion yuan, 0.189 billion yuan, and 0.246 billion yuan, respectively. Using the PE valuation method, the average PE (2024E) value of comparable companies was 41.81 times, and Jingzhida PE (2024E) was given 35x-45x. The corresponding reasonable market value range was 4.998 billion yuan to 6.427 billion yuan, and the corresponding reasonable value range was 53.17 yuan/share - 68.36 yuan/share, giving a “superior to the market” rating.

Risk warning: Downstream production expansion falls short of expectations, slow progress in new product development, intensifying market competition, etc.