The company's 2024Q2 performance is expected to increase month-on-month, and profitability continues to increase. In line with the “buy” rating, the company issued the 2024 semi-annual report performance forecast. The 2024H1 company expects to achieve operating income of 11.41-13.14 billion yuan, +35.4% ~ +55.93%; net profit to mother of 2.57-2.96 billion yuan, +42.84% ~ +64.51%; net profit of 2.44-2.81 billion yuan, YoY +51.64% ~+ 74.63%. Among them, 2024Q2's revenue is expected to be 5.551-7.281 billion yuan, +21.85% ~ +59.83% month-on-month, -5.26% ~ +24.26%; net profit to mother of 1.443-1.833 billion yuan, +19.54% ~ +51.83%, month-on-month +28.13% ~ +62.75%; net non-net profit of 13.68 to 1.738 billion yuan, YoY +27.51% ~+ 62.01% As a leading domestic semiconductor equipment platform enterprise, the large-scale effect was evident. We raised the company's profit forecast for 2024-2026. The estimated net profit for 2024-2026 is 5.893/7.921/10.05 billion yuan (previous value 5.813/7.91/9.955 billion yuan), and the 2024-2026 EPS is expected to be 11.10/14.92/18.92 yuan (previous value 10.95/14.90/18.75 yuan), corresponding to the current stock price PE was 29.6/22.0/17.4 times, maintaining a “buy” rating.

The market share of IC equipment has been rising steadily, and the large-scale effect has driven performance growth in 2024H1's revenue, which is mainly due to the company continuing to scrutinize customer needs, enriching the product matrix, and continuously improving its core competitiveness; and the process coverage and market share of the company's process equipment used in the IC field, such as etching, film deposition, cleaning, furnace tubes and rapid annealing, continued to rise steadily. In terms of performance, 2024H1's net income interest rate continued to rise, mainly due to: (1) the company's revenue scale continued to expand, and scale effects gradually became apparent; (2) intelligent manufacturing helped the company's operating level effectively improve; and (3) the cost ratio declined steadily.

Semiconductor equipment sales in mainland China remain leading, and platform-based leaders have significantly benefited from advanced process production expansion. According to SEMI forecasts, global semiconductor equipment sales in 2024 were 109 billion US dollars, +3.4% over the same period last year. Driven by artificial intelligence computing, mainland China's continued strong equipment spending and large investments in DRAM and HBM are driving up forecasts. Among them, the amount of equipment shipped from mainland China will exceed 35 billion US dollars. Global semiconductor equipment sales will continue to grow in 2025 and are expected to reach a new high of $128 billion, while mainland China will maintain its leading position during the forecast period. As a leading domestic semiconductor equipment platform, in the context of expanding production of advanced domestic manufacturing processes, we expect that the company will continue to apply a variety of new products, and performance is expected to continue to be released.

Risk warning: The recovery in industry sentiment falls short of expectations, product development falls short of expectations, and the competitive landscape of the industry intensifies.