2024Q2 profit improved month-on-month, optimistic about the company's long-term development, and maintained a “buy” rating

The company released its 2024 semi-annual report. 2024H1 achieved revenue of 1.459 billion yuan, +8.69% year over year; net profit to mother -0.067 billion yuan, -0.241 billion yuan; net profit after deducting non-return to mother -0.042 billion yuan, -0.092 billion yuan year on year; gross sales ratio of 12.38%, -14.89pcts year on year. 2024Q2 achieved revenue of 0.78 billion yuan, +9.83% year over month; net profit to mother -0.004 billion yuan, -0.143 billion yuan year on year, +0.059 billion yuan month on month; net profit without return to mother 0.008 billion yuan, -70.72% year on year, +0.057 billion yuan month on month; gross sales margin of 14.55%, -10.58 pcts year on month, +4.67 pcts month-on-month. The main reasons for losses in the first half of 2024 were: (1) fixed costs such as depreciation costs increased a lot during the reporting period; (2) the unit sales price of silicon wafer products and power chip products declined; and (3) fair value change losses caused by falling stock prices of listed companies held. We maintain the company's profit forecast. We expect net profit to be 0.204/0.507/0.796 billion yuan in 2024-2026, and the PE corresponding to the current stock price is 63.2/25.5/16.2 times. We are optimistic about the company's long-term development and maintain a “buy” rating.

The company's silicon wafer business benefited from industry recovery, revenue increased both year on month, and shipments rose sharply

Demand in the semiconductor silicon wafer segment is strong and has begun to bottom up, and capacity utilization has increased markedly. Localized replacement of large silicon wafers is progressing steadily, and product climbing progress is expected to accelerate. Currently, the company's production capacity for 6-inch and 8-inch epitaxial wafers is fully loaded, and delivery delays have occurred; shipments of 12-inch silicon wafers have climbed rapidly, and shipments have repeatedly reached new highs. 2024H1's semiconductor silicon wafer business achieved revenue of 1.022 billion yuan, +12.96% YoY, +15.13% month-on-month; equivalent to 6-inch sales of 6.6885 million wafers, +46.22% YoY and +26.94% month-on-month. Among them, 12-inch silicon wafers sold 0.4075 million wafers, +89.63% YoY and +43.65% YoY.

The company's RF chip business customer certification went smoothly. The rapid release of various products benefited from complete breakthroughs in product technology, and customer verification went smoothly. The RF chip verification process has basically covered mainstream domestic mobile phone chip design customers, and domestic replacement has been accelerated; multi-specification, small-batch, multi-purpose, and high-value-added special purpose products have continued to be released, and low-orbit satellite customers have passed verification and begun mass shipments. 2024H1's compound semiconductor RF chips achieved revenue of 0.128 billion yuan, +233.89% year over year and +29.79% month over month. In terms of sales volume, sales volume was 0.0176 million pieces, +288.18% year over year and +31.84% month over month.

Risk warning: downstream demand falls short of expectations; capacity release falls short of expectations; customer acquisition falls short of expectations.