Core views:

CMP's market share continued to increase, and 24Q2 revenue and profit grew steadily. The company issued an annual report for 24 and a half years. 24H1, company revenue 1.497 billion yuan, yoy +21.23%; net profit to mother 0.433 billion yuan, yoy +15.65%; gross profit margin 46.29%, yoy-0.03pct; net profit margin 28.91%, yoy-1.39pct. 24Q2, the company's revenue was 0.816 billion yuan, yoy +32.03%, qoq +20%; net profit to mother 0.231 billion yuan, yoy +27.89%, qoq +14.03%; gross profit margin 44.93%, yoy-1.06pct, qoq-2.99pct; net profit margin 28.24%, yoy-0.91pct, qoq-1.48pct. In 24H1, the company's CMP market share continued to increase, and the scale of business such as key consumables and maintenance services gradually increased, while revenue from wafer recycling and wet processing equipment gradually increased, driving a steady increase in the company's revenue and net profit to mother.

Product diversification opens up room for growth and promotes the construction of new production bases. According to the company's 24-year semi-annual report, the company's product platformization process is progressing rapidly. The new polishing system architecture Universal H300 has been shipped in small batches, and client verification has been smooth; the 12-inch ultra-precision wafer thinning machine Versatile-GP300 has received batch orders from leading companies in various fields and has been highly recognized by customers; the 12-inch wafer thinning and coating all-in-one machine Versatile-GM300 has been sent to leading domestic sealing and testing companies for verification; the company's 12-inch wafer Edge cutting equipment has been sent to multiple customers for verification. At the same time, according to the company's “Notice on Investing in the Construction of an Integrated Circuit Equipment R&D and Manufacturing Base in Shanghai”, the company plans to build an equipment R&D and manufacturing base project in Lingang to further expand the company's semiconductor equipment production capacity, promote R&D and production of high-end semiconductor equipment, and quickly lay out domestic and foreign markets. The company has a prominent position as a leader in the CMP market. At the same time, it is actively promoting the layout of new products such as advanced packaging. In the future, it is expected to take the lead in benefiting from the expansion of downstream wafer production lines and the domestic replacement process of equipment.

Profit forecasting and investment advice. The company's net profit for 24-26 is expected to be 0.992/1.266/1.568 billion yuan, maintaining the view that the company has a reasonable value of 167.66 yuan/share and maintaining a “buy” rating.

Risk warning. Fab production expansion falls short of expectations; changes in industrial policy; market development falls short of expectations.