Incident: The company released its 2024 mid-year report. In the first half of 2024, the company achieved operating income of 0.449 billion yuan, a year-on-year increase of 41.04%; net profit to mother of 0.101 billion yuan, a year-on-year increase of 38.56%; net profit after deducting 0.099 billion yuan, an increase of 45.84% year-on-year.
The performance was outstanding, and the cost rate declined during the period
(1) Operating conditions: On a quarterly basis, in 2024 Q2, the company achieved revenue of 0.251 billion yuan, an increase of 55 over the previous year.
37%; Q2 achieved net profit to mother of 0.061 billion yuan, a year-on-year increase of 55.58%. The main reason is that the company continues to explore the market, increase product investment, increase comprehensive strength, and increase sales.
(2) Profitability: In the first half of 2024, the company's gross sales margin and net sales margin were 41.88% and 22.40%, respectively, -4.17pct and -0.41pct year-on-year respectively. The gross margin declined year-on-year, mainly affected by changes in accounting policies. The company is highly competitive in the field of micro-nano direct writing lithography. Through continuous research and development, the company has built a technical moat for “light,” “machine,” “electricity,” “soft,” and “computing.” The company's competitiveness is strong, and the pan-semiconductor business with a higher gross margin is developing rapidly, and the company's profitability is expected to stabilize.
(3) Period expenses: In the first half of 2024, the company's sales, management, finance, and R&D expenses rates were 3.53% and 4, respectively.
63%, -2.04%, 10.89%, -3.3pct, +0.2pct, -0.53pct, and -1.3pct, year-on-year, respectively. The company's expense control was strengthened, and the overall cost rate declined during the period.
PCBs and pan-semiconductors have evolved together, and direct writing lithography applications continue to expand.
(1) PCB business: Benefiting from product upgrades+exports. ① Product upgrade: Driven by demand for computing power, etc., demand for high-end PCBs such as multilayer boards, HDI boards, flexible boards, and IC carrier boards is improving. The company strengthened the product upgrade of PCB equipment from the two dimensions of R&D and production expansion, promoted a continuous increase in the market share of high-end PCB products such as multi-layer boards, HDI boards, flexible boards, and IC carrier boards, and simultaneously increased production expansion of NEX series direct writing lithography equipment in the high-end solder mask market; ② Exports:
The company increased its market layout in Southeast Asia. The company actively builds overseas sales and operation and maintenance teams to give full play to its brand, technology development and marketing advantages, and enhance the service capabilities of overseas customers. Currently, the company's overseas expansion is rapid, export orders are performing well, and the growth of overseas markets will continue to drive revenue growth.
(2) Pan-semiconductor: The application of direct writing lithography technology continues to expand and deepen. The company continues to expand on multiple tracks and enrich its product matrix. Direct writing lithography equipment can be used in IC, MEMS, biochips, discrete power devices, IC mask manufacturing, advanced packaging, display lithography, etc., and the application of direct writing lithography technology continues to deepen. Through the layout of key equipment in the semiconductor processing process, the company actively lays out advanced packaging platform enterprises to create a new growth pole under the general trend of localization of advanced packaging equipment.
Direct writing on the lithography technology platform, optimistic about the development of new businesses such as advanced packaging equipment. The company has accumulated deep technology in the field of micro-nano direct writing lithography. Through continuous research and development, it has built a technical moat for high-end equipment in “light”, “machine”, “electricity”, “soft”, and “computing”. As domestic demand for high-end PCBs grows and the demand for localization rates increases, the company accelerates its continuous layout in markets such as carrier boards, advanced packaging, new displays, mask plate making, power discrete devices, photovoltaic copper electroplating, etc., further opening up room for growth.
Profit forecast: Based on the accumulation of underlying direct writing lithography technology, the company is deeply involved in the PCB direct writing lithography market, while expanding the direction of emerging industries such as pan-semiconductors, which is expected to open up room for long-term growth for the company. We keep our profit forecast unchanged. We expect the company's revenue for 2024-2026 to be 1.112, 1.523, and 2.097 billion yuan, respectively, and net profit to mother of 0.257, 0.346, and 0.465 billion yuan, respectively. The corresponding PE is 27.0, 20.0, and 14.9 times, respectively, maintaining the “gain” rating.
Risk warning: the risk of increased competition in the industry; the risk that the advanced packaging industry will not progress as expected; the risk that the company's technological progress will fall short of expectations; the risk that the information used in the research report will not be updated in a timely manner, etc.