Incident Overview

The company released its 2024 mid-year report.

The Q2 revenue side improved significantly. New orders achieved rapid growth. 2024H1 achieved revenue of 0.694 billion yuan, or -0.29% year over year. Of these, Q2 achieved revenue of 0.449 billion yuan, +10.31% year over year. Revenue improved markedly in a single quarter, mainly due to the acceleration of the company's order delivery and acceptance. By product, we estimate that Qiandao Track's revenue will grow rapidly, and that the revenue side of advanced packaging and front-end cleaning machines will be under pressure in the short term. 2024H1 signed a new order of 1.219 billion yuan, an increase of about 30% over the previous year. Among them, new orders for Qiandao coating and imaging maintained good year-on-year growth, and new orders for advanced packaging and small sizes increased significantly. New orders for temporary bonding and unbonding of new products used in the Chiplet field increased more than tenfold year-on-year, and Qiandao single-piece high-temperature sulfuric acid chemical cleaning equipment also received orders from important domestic customers. As of 2024H1, the company's on-hand orders exceeded 2.6 billion yuan, a record high. We believe that with the accelerated confirmation of subsequent orders, we are optimistic that the revenue side will improve significantly in the second half of the year.

The expense ratio increased dramatically during the period, and the H1 profit level declined. 2024H1's net profit/net profit without return to mother was 0.76 million yuan and 0.36 million yuan, respectively, or -43.88%/-65.52%. Among them, Q2 net profit to mother/net profit without return to mother were 0.60 million yuan and 0.27 billion yuan, respectively, or -13.73%/-41.75%. The 2024H1 net sales margin and net profit margin after deduction were 10.77% and 5.16%, respectively, compared with -8.73 pct and -9.75 pct, respectively. The profit level declined markedly. 1) Margin side: 2024H1's gross profit margin was 40.22%, compared to -3.22pct. We determined that it was mainly due to the increase in Qiandao Track's revenue share, and Qiandao Track's gross margin was lower than that of advanced packaging equipment during the climbing phase. 2) Expense side: The 2024H1 company's expenses rate for the period was 42.09%, +12.36pct year on year. Among them, sales, management, R&D, and financial expense ratios were +2.52/+4.46/+5.80/ -0.42pct, respectively, mainly due to the effects of related personnel expansion, increased investment, and share payments. 3) The amount of government subsidies included in current profit and loss in 2024H1 non-recurring profit and loss was 50.724 million yuan, which increased the company's profit-side performance to a certain extent.

Qiandao gluing equipment continues to break through, and chemical cleaning machines and bonding equipment have made positive progress. While stabilizing its leading position in gluing and imaging equipment, the company continues to expand from the backstage to the front-end field. At the same time, it continues to expand cleaning, bonding, paving and other equipment to continuously improve the product system and open up room for growth. 1) Glue-coated imaging equipment: While stabilizing competitiveness in the advanced packaging market, the company focuses on increasing investment in the future market. It has now successfully launched various models of products, including offline, Iline, KrF and ArF immersion, successfully seizing a place in downstream clients, and is rapidly advancing the R&D process of the next-generation high-capacity glue-coated projector FTEX. 2) Cleaning equipment: The company's Qiandao physical cleaning machine has been widely used as a mainstream model by well-known customers such as SMIC, Shanghai Huali, and Qingdao Xinen; chemical cleaning machines have received verification orders from many important domestic customers, and 24H1's high-temperature SPM chemical cleaning machines have received verification orders from leading domestic logic customers. 3) Bonding equipment: The commercial promotion and verification of the company's temporary bonding machines and unbonding machines is progressing smoothly. Currently, more than 10 units have been mass-produced or verified. In addition, the company also released an all-in-one SiC chipping machine. Compared with the grinding wheel cutting process, production efficiency has been greatly improved, further improving the company's product layout in the small-size field.

Investment advice

We maintain our 2024-2026 revenue forecasts of $21.22, 28.03, and $3.778 billion, compared with +24%, +32%, and +35%. Taking into account increased expenses, we adjusted 2024-2026 net profit of $0.283, 0.413, and 0.556 billion yuan (original values were $3.15, 4.12, and 556 million yuan), respectively, +13%, +46%, and +35% year-on-year. Also affected by the increase in share capital, we adjusted the 2024-2026 EPS They were 1.41, 2.06, and 2.78 yuan respectively (the original values were 2.29, 2.99, and 4.03 yuan), and the stock price of 2024/8/30 was 62.17 yuan, corresponding to PE of 44, 30, and 22 times, maintaining an “overweight” rating.

Risk warning

The semiconductor industry is declining, new product expansion falls short of expectations, etc.