Key points of investment:
24H1 performance: Q2 revenue growth rate improved, net margin fixed
(1) Revenue: 24H1 achieved revenue of 0.694 billion yuan, -0.3% year over year, single Q2 revenue of 0.449 billion yuan, +10% year over year. (2) Net profit to mother: 24H1 achieved net profit of 0.076 billion yuan, -44% year over year, single Q2 net profit of 0.06 billion yuan, or -14% year over year. (3) Profitability: 24H1 gross profit margin 40.22%, net profit margin 10.77%; single Q2 gross profit margin 40.18%, a slight decrease from month to month, and a net profit margin of 13.15%, a significant increase from month to month.
The company has consolidated its leading position in the gluing and imaging segment. The company's products include glue coating equipment for lithography processes, single-piece wet processing equipment, temporary bonding and unbonding equipment, etc. In terms of glued imaging equipment, the company's products have successfully achieved full coverage of mature process nodes at 28 nm and above in the field of advanced wafer processing, and advanced process technology at 14 nm and below is also being verified in an orderly manner. In the first half of 2024, the company signed a new order of 1.219 billion yuan, an increase of about 30% over the previous year. Among them, new orders for Qiandao gluing and imaging maintained good year-on-year growth, and new orders for advanced packaging and small-size applications increased significantly. New orders for temporary bonding and unbonding of new products used in the Chiplet field increased more than tenfold year over year, and the company's strategic new product Qiandao single-piece high-temperature sulfuric acid chemical cleaning equipment also received orders from important domestic customers. By the end of June 2024, the company's on-hand orders exceeded 2.6 billion yuan, a record high. Looking ahead to the second half of the year, we think it is worth looking forward to the growth of new orders for new products such as advanced gluing and temporary bonding by the company.
The high-temperature sulfuric acid chemical cleaning machine will soon be shipped to the customer. Broaden the cleaning equipment layout. The company expects to launch the first Qiandao single-piece high-temperature sulfuric acid chemical cleaning machine KS-CM300 on August 30 at the new Lingang factory area in Shanghai to carry out process verification. This machine is the first high-end equipment independently developed by the company's Shanghai subsidiary. The high-temperature SPM cleaning process for this machine is recognized by the industry as one of the processes with the highest performance requirements in the 28nm/14nm process, and is also the most difficult and challenging wet process in the industry. Shipments of chemical cleaning machine equipment are expected to drive the company to expand to a larger racetrack.
Demand for packaging picked up, and orders for advanced packaging equipment grew rapidly in the first half of '24. Later, the company received batch repetitive orders for many domestic customers and leading overseas packaging customers. On the other hand, in the field of 2.5D/3D advanced packaging, the company has successfully launched a variety of new products including temporary bonding, unbonding, frame cleaning, and Deflux cleaning. In the first half of '24, the commercial promotion and verification of the company's temporary bonding machines and unbonding machines progressed smoothly. The company has reached in-depth cooperation with many domestic 2.5D and HBM customers, and currently has more than 10 units in mass production or verification orders. As domestic advanced packaging customers expand production, we expect to drive orders for Xinyuan Micro-Advanced Packaging related equipment.
Profit forecasting and investment advice
Considering the company's investment in R&D of equipment such as chemical cleaning and advanced packaging this year, we slightly lowered our profit forecast. We forecast the company's 2024-2026 net profit of 0.28/0.42/0.56 billion yuan (previous value: 0.3/0.47/0.63 billion yuan), corresponding to the current P/E ratio of 42/27/21 times. The company has a stable position as a leading domestic leader in glued imaging equipment, and is also actively expanding chemical cleaning and advanced packaging equipment. Maintain a “buy” rating.
Risk warning
Downstream demand falls short of expectations, industry competition increases risks, and trade friction risks.