Incident Overview

The company released its 2024 mid-year report.

Cleaning equipment achieved rapid growth, and the 2024 revenue guide was raised, and the 2024H1 company achieved revenue of 2.404 billion yuan, +49.33% year over year; Q2 achieved revenue of 1.483 billion yuan, +49.14% year over year, continuing the rapid growth trend. By product, cleaning equipment is still the main driving force for the company's revenue growth, and its share of revenue continues to rise. According to ACMR 24Q2 performance report: 1) Cleaning equipment: 2024H1 achieved revenue of about 0.263 billion US dollars, +76% year over year; revenue share was 74%, about +6pct year on year. 2) ECP & furnace tubes and other equipment: 2024H1 achieved revenue of about 0.065 billion US dollars, +42% year on year; revenue share was 18%, or -3 pct year on year. 3) Advanced packaging and services and spare parts: 2024H1 achieved revenue of about 0.027 billion US dollars, +14% year over year, accounting for 8% of revenue, -3 pct year on year. By the end of 2024H1, the company's inventory and contract liabilities reached 4.388 billion yuan and 1,042 billion yuan respectively, +11.8%/18.9% month-on-month, verifying that the orders in hand were sufficient. Furthermore, the company raised its 2024 revenue forecast to 5.3-5.88 billion yuan (original value 5-5.8 billion yuan), +36% -+51% year-on-year, and continued to maintain a rapid growth trend.

Equity payments & investment income declined, and 24H1's profit level declined. 2024H1 achieved net profit of 0.443 billion yuan, +0.85% year over year; net profit after deduction was 0.435 billion yuan, +6.92% year over year. Looking at Q2 alone, the company achieved net profit of 0.363 billion yuan, +17.66% year over year; net profit after deduction was 0.35 billion yuan, +17.60% year over year. The Q2 single quarter results improved significantly. In terms of profitability, 2024H1's net sales interest rate and deducted non-net interest rate were 18.44% and 18.08%, respectively, compared with -8.89 and -7.17pct. The profit level declined markedly. We think it was mainly due to the decline in equity payments & investment income. 1) Margin side: 2024H1 sales gross margin was 50.68%, -0.92pct year on year. The performance was stable and excellent. 2) Expense side: The 2024H1 company's expenses rate for the period was 30.15%, +6.84pct year on year. Among them, sales, management, finance, and R&D expenses were +1.97, +2.36, +1.17, and +1.33pct, respectively. The main reason was the continuous expansion of related personnel, and equity payment fees of 0.17 billion yuan were generated during the reporting period, which was a significant increase over the same period last year. 3) In addition, the net investment income of 2024H1 was 13.46 million yuan, or -75.63%; the net income from the change in fair value of 2024H1 was -7.78 million yuan, and 2023H1 was 14.88 million yuan, all of which affected the company's profit-side performance to a certain extent.

The product line continues to be enriched, and the active layout of PECVD and glued imaging equipment opens up room for growth

While stabilizing its position as a leading local leader in cleaning equipment, the company is actively expanding equipment such as semiconductor electroplating, furnace tubes, gluing, and PECVD to improve the industrial layout. 1) Electroplating & furnace tubes, etc.: Most of Qiandao copper interconnect electroplating equipment has been mass-produced, establishing the company's leading position in the domestic 12-inch copper interconnect electroplating equipment market; based on ECP electrochemical electroplating technology, it has successfully developed advanced package electroplating equipment, three-dimensional TSV electroplating equipment, and high-speed electroplating equipment to fill domestic gaps and form mass sales; vertical furnace tube equipment mainly includes low LPCVD, ALD, oxidation annealing furnaces, etc., all under verification, and some have entered mass production line production. 2) PECVD equipment: Ultra Pmax TM plasma enhanced chemical vapor deposition (PECVD) equipment, which will soon deliver its first PECVD device to an integrated circuit customer in China. Based on this, the company has launched a new Ultra Pmax TM+ PECVD device platform. 3) Gum-coated imaging equipment: The glue-coated imaging track equipment developed by the company has entered the ArF process verification stage by the client.

Investment advice

We expect the company's 2024-2026 revenue to be $55.89, 76.04 and 9.581 billion yuan, respectively, with year-on-year growth rates of 44%, 36% and 26%; net profit to mother of 12.21 billion yuan, 17.06 billion yuan, and 2,214 billion yuan, respectively, with year-on-year growth rates of 34%, 40% and 30%; EPS of 2.80, 3.91 and 5.08 yuan, respectively. The company's 2024/08/15 stock price of 92.75 yuan corresponds to PE of 33, 24, and 18, respectively. It was covered for the first time, giving it an “gain” rating.

Risk warning

Downstream production expansion falls short of expectations, new product development falls short of expectations, semiconductor business expansion falls short of expectations, etc.