occurrences

The company announced its 2024 semi-annual results announcement. In the first half of the year, the company achieved operating income of 0.694 billion yuan, -0.29% year over year; net profit to mother 0.076 billion yuan, or -43.88% year over year; and basic earnings per share of 0.55 yuan/share.

Q2 Revenue improved significantly, and expenses increased a lot in the short term

Affected by factors such as stock order structure, production delivery, and acceptance cycle, the company's revenue declined slightly in the first half of this year, but the Q2 improvement was obvious, with revenue +84.02% month-on-month. In terms of profitability, 2024H1's gross profit margin and net profit margin were 40.22% and 10.77% respectively, -3.22pct and -8.73pct, respectively.

In terms of cost rates, the cost rate during 2024H1 was 42.09%, +12.36pct year on year. The main reason was a significant increase in personnel remuneration, R&D expenses, etc.; sales expenses, management expenses, R&D expenses, and financial expenses were 11.06%, 15.16%, 16.87%, and -1.01%, respectively, +2.52pct, +4.46pct, +5.80pct, and -0.42pct, respectively.

The new order was good, and the new product is progressing smoothly

Benefiting from the recovery in the downstream market sentiment and the continuous increase in the competitiveness of the company's products, the company achieved good year-on-year growth in new orders. 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 front-end gluing and developing films maintained good year-on-year growth, and new orders for advanced packaging and small-size applications increased significantly compared to the same period, while new orders for temporary bonding and unbonding of new products used in the Chiplet field increased more than tenfold year over year. In addition, the company is progressing smoothly in the iteration and development of various new products, such as a next-generation ultra-high-capacity gluing projector, chemical cleaning machine, temporary bonding machine, and unbonding machine.

Profit Forecasts, Valuations, and Ratings

Considering that the company's revenue recognition pace is greatly affected by delivery, we expect the company's revenue for 2024-2026 to be 2.112/2.823/3.954 billion yuan, up 23.01%/33.65%/40.07%, respectively; net profit to mother is 0.294/0.433/0.602 billion yuan, respectively, with year-on-year growth rates of 17.15%/47.53%/38.95%, and a 3-year CAGR of 33.91%; EPS is 1.46/ 2.16/3.00 yuan/share, corresponding PE is 43x/29x/21x, respectively.

Given that the company is a leader in domestic Track equipment and the new business is expected to continue to grow at a high rate, it maintains a “buy” rating.

Risk warning: New product development progress falls short of expectations; downstream fab production expansion falls short of expectations;