Core views

The main business shows that revenue growth in the semiconductor sector was compounded by a high increase in revenue in the semiconductor sector. 2024H1's revenue increased slightly year-on-year, and revenue growth combined with cost reduction and efficiency gradually came to fruition, and performance improved markedly. The company has sufficient orders, and the semiconductor sector has gradually become a support for order and performance growth. At the same time, the company maintains high investment in R&D, and has made major breakthroughs and progress in all downstream businesses. Film thickness products, OCD equipment, and electron beam defect review equipment in the semiconductor sector have obtained repeated orders for advanced processes, and it is optimistic that performance will continue to improve in the second half of the year.

occurrences

2024H1 achieved operating income of 1.121 billion yuan, up 0.96% year on year; net profit due to mother 0.05 billion yuan, up 312.00% year on year; net profit after deducting non-return to mother -0.003 billion yuan, or -0.045 billion yuan for the same period in 2023.

2024Q2 achieved operating income of 0.703 billion yuan, up 38.14% year on year; net profit to mother 0.066 billion yuan, up 30024.15% year on year; net profit after deducting non-return to mother 0.021 billion yuan, up 145.28% year on year.

Brief review

The semiconductor sector saw a high increase in revenue and a marked improvement in performance

The main business shows that revenue growth in the semiconductor sector was compounded by a high increase in revenue in the semiconductor sector, and revenue grew in half a year. 2024H1 achieved revenue of 1.121 billion yuan, up 0.96% year over year.

Looking at revenue downstream, 2024H1's revenue in the display, semiconductor, and new energy sectors was 0.776, 0.228, and 0.094 billion yuan respectively, up 5.35%, 86.17%, and -59.83% year-on-year respectively.

In terms of profitability, 2024H1 achieved a gross profit margin of 43.09%, -0.67pct year over year.

Looking downstream, the company showed that gross margins in the semiconductor and new energy sectors were 44.28%, 42.41%, and 32.23%, respectively. The gross margin in the semiconductor sector declined significantly, mainly due to the increase in film thickness and electron beam equipment with low gross margin. It is expected that gross margin will return to normal levels as equipment products for advanced manufacturing processes are gradually tested and confirmed in the second half of the year. Overall, although gross margins in the semiconductor sector have declined, after the share of products in the new energy sector with low gross margins declined, benefiting from the company's strengthened cost control, overall profitability showed only a slight downward trend due to changes in the product structure.

On the cost side, the 2024H1 company's cost rate during the period reached 50.49%, +0.56pct. Among them, sales, management, R&D, and finance expenses were 8.75%, 1 2.53%, 26.32%, and 2.90%, respectively. The year-on-year ratio was -1.20pct, +0.19pct, +0.70pct, and +0.86pct, respectively. The company's overall cost control performance was good.

On the profit side, 2024H1's net profit to mother was 0.05 billion yuan, up 312.00% year on year; net profit without return to mother was 0.003 billion yuan, or -0.045 billion yuan for the same period in 2023. Net profit due to mother improved markedly, and the margin of loss after deducting non-net profit narrowed.

Onhand orders fully supported subsequent performance. Under high-intensity R&D investment, all downstream industries have made major breakthroughs and progress. Ongoing orders are sufficient, and the semiconductor sector has gradually become a support for performance growth. From the perspective of in-hand orders, as of August 27, 2024, the company had obtained a total order amount of about 3.441 billion yuan, an increase of about 9.94%; of these, on-hand orders in the display sector were about 1.038 billion yuan, a year-on-year decrease of 17.09%; in-hand orders in the semiconductor sector were about 1.767 billion yuan, an increase of 29.45% year on year; in the new energy sector, about 0.637 billion yuan, an increase of 24.17% year on year. The company's semiconductor and new energy sector has become the company An important support for business performance. From the perspective of contract liabilities and inventory, the company's contract debt at the end of 2024H1 reached 0.446 billion yuan, up 29.71% year on year, up 0.46% from the end of 2023; inventory reached 1.761 billion yuan, up 19.83% year on year, up 2.19% from the end of 2023.

The company maintains a high level of investment in R&D, and has made major breakthroughs and progress in all downstream businesses. 2024H1 invested 0.301 billion yuan in R&D, up 2.62% year over year.

In the field of display testing, the company invested 0.135 billion yuan in R&D, down 6.85% from the previous year, increasing research and development efforts in panel and advanced process equipment, intelligent and precision optical instruments, and new display products such as OLED and micro-OLED, further increasing the expansion of overseas core customers. In the field of semiconductor testing, the company invested 0.134 billion yuan in R&D, an increase of 31.29% over the previous year, and R&D resources are skewed towards the semiconductor field. Currently, the core products have covered advanced manufacturing processes, thick film products, and OCD equipment Furthermore, electron beam defect review equipment has received repeated orders for advanced manufacturing processes; in the field of new energy, R&D investment was 0.032 billion yuan, a year-on-year decrease of 31.07%. Significant progress has been made in related product development. Some products have been certified by target customers and large-scale sales have been achieved, and at the same time, customer expansion results, mainly overseas, are remarkable.

Investment advice

The company is expected to achieve net profit of 0.184, 0.306, and 0.408 billion yuan respectively in 2024-2026, with year-on-year increases of 22.58%, 66.31%, and 33.33%, respectively. Corresponding to 2024-2026 PE valuations, 75.53x, 45.42x, and 34.06x, respectively, maintaining a “buy” rating.

Risk analysis

1) Downstream production expansion falls short of the expected risk: If the investment intensity of the downstream testing industry decreases, the company will face the risk of falling market demand, which will adversely affect the company's business performance.

2) Technology R&D risk: If the company's technology research and development falls short of expectations or industrial certification fails to meet customer standards, the company will face adverse effects such as loss of customers.

3) Risk of global trade friction: If global trade frictions cause the company's supply chain to continue to be tight, the company's production capacity and delivery schedule will be limited to varying degrees.

4) Market competition increases risk: The company has many competitors in the field of testing. If the company is unable to effectively cope with the competitive environment in the market, it will face adverse effects such as a decline in its position in the industry.