Incident Overview
Chipboard released its 2024 semi-annual report on August 21, 2024: the first half of 2024 achieved operating income of 0.449 billion yuan, an increase of 41.04% year on year; net profit to mother was 0.101 billion yuan, up 38.56% year on year; gross margin was 41.88%, a decrease of 4.2 pct year on year; and net interest rate was 22.40%, a decrease of 0.4 pct year on year. Fluctuations in gross margin were mainly adjusted by accounting standards. Guaranteed warranty expenses originally included in sales expenses were reclassified and included in operating costs. The amount for the first half of the year was 19.8859 million yuan.
The second quarter of 2024 achieved operating income of 0.251 billion yuan, up 55.37% year on year and 26.93% month on month; net profit to mother was 0.061 billion yuan, up 55.58% year on year, up 53.25% month on month; gross margin was 40.32%, down 7.5 pct year on year; and net interest rate was 24.24%, up 0.03 pct year on year.
PCB industry upgrade & export two-wheel drive growth
Leading the domestic replacement of LDI equipment in the middle and high-end PCB market. Demand for products such as AI servers and supporting high-end switches continues to grow, driving the demand for large-size, high-rise, high-frequency, high-speed, and high-heat dissipation PCB products, as well as increasing the value of PCBs. 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 multilayer 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.
Benefit from the PCB industry migration. The company has increased its market layout in Southeast Asia, mainly in Thailand and Vietnam. The Thai subsidiary has completed registration and will actively build an overseas sales and operation and maintenance team this year. The company is expanding rapidly overseas, and the export order performance is good. In the first half of 2024, the total revenue from Hong Kong, Macao, Taiwan and overseas was 65.62 million yuan, which surpassed the full year of last year, accounting for 14.6%. The gross margin was 58.84% in Hong Kong, Macao and Taiwan, and 82.13% in other regions, higher than the mainland's gross profit margin of 38.8%.
The layout of the pan-semiconductor field continues to advance
IC carrier board: Advanced packaging drives the growth of the ABF carrier board market. The company is a domestic replacement leader. It has prepared IC Substrate with 3-4 μm analysis capacity, and its technical indicators are comparable to leading international companies. Currently, MAS4, a carrier board device with a resolution of 4 μm, was successfully verified on the client side. At the same time, the company's fixed increase project supports the acceleration of IC carrier board production capacity expansion, and overseas markets continue to seek breakthroughs.
Advanced packaging: The company's WLP wafer-level packaging equipment has great advantages in rewiring, interconnection, intelligent correction, etc., and meets the needs of the semiconductor industry with flexible digital masks and high yield.
In addition, the company also has a layout in PLP board level packaging equipment, which supports packaging in the fields of modules, optical chips, power devices, etc. The company is speeding up the production efficiency of packaging equipment to expose requirements on large-area chips with higher computing power.
Mask plate making: The company's first mask plate making equipment that meets the 90nm node plate making requirements for mass production has been verified by the client, and the company will also advance the research process of 90nm-65nm plate making and lithography equipment to meet the updated iteration of semiconductor mask plate technology.
Develop a cutting-edge layout around advanced packaging. In April 2024, the company launched a bonding process solution and successfully developed a new WA 8 wafer alignment machine and a WB 8 wafer bonding machine. Both of these devices are key equipment in the semiconductor processing process. In addition, the company has also laid out a technical roadmap for measurement, exposure, and inspection required for advanced packaging.
Investment advice
Considering the high level of downstream PCB prosperity, we forecast that the company's 2024-2026 operating income will be 1.208/1.689/2.045 billion yuan (1.19/1.533/1.841 billion yuan before adjustment), and net profit to mother will be 0.279/0.391/0.507 billion yuan (0.268/0.355/0.455 billion yuan before adjustment), with the current total share capital of 0.131 billion shares The calculated diluted EPS was 2.1/3.0/3.9 yuan. The company's current stock price is 25/18/14 times the PE multiples of the predicted EPS for 2024-2026, maintaining a “buy” rating.
Risk warning
1) Technology introduction falls short of expectations; 2) downstream demand falls short of expectations; 3) Fund-raising project implementation falls short of expectations; 4) loss of core technical personnel.