The company's recent situation

Recently, Chipset received a survey from institutional investors. According to the investor relations records disclosed by the company, we believe that: 1) liquid-cooled heat exchangers are expected to bring new application space to the company's LDI equipment; 2) advanced packaging equipment is progressing smoothly in client-side verification; 3) the order demand for senior leading customers is relatively determined, and the overseas order growth trend is obvious.

reviews

Liquid-cooled evaporation plates create incremental requirements for direct writing lithography. As AIGC spreads to the end side, end side chips place higher demands on heat dissipation performance, leading to an increase in demand for liquid-cooled evaporator VC (Vapor Chamber) solutions. Heat sinks are traditionally made in the form of stamping, but due to the requirements for alignment and flatness, two exposures are required. The first one is done with a traditional exposure machine, and the second one uses LDI equipment. We believe that as the leading manufacturer of direct writing lithography in China, Chipboard is expected to welcome new industrial demand and business expansion.

Compared with traditional lithography equipment, direct writing lithography equipment is not limited by the size of the mask plate, and has a better correction mechanism, which can help improve the overall yield of advanced packaging processes such as 2.5D. According to the company's management, the relevant products have been mass-produced and tested on a number of leading clients, and the verification is progressing smoothly. In 2024, under the overall weak recovery trend of the PCB industry, we saw that the development of terminals such as AI servers and smartphones brought about structural growth in high-end products such as HDI and FPCB. The company's management mentioned that demand for high-end boards from downstream customers is growing rapidly. Combined with the shift in production capacity from downstream customers in Southeast Asia, the trend of overseas orders is clearly growing.

According to the three-quarter report previously released on October 25, the company achieved revenue of 0.268 billion yuan in a single quarter in 3Q24, up 30.9% year on year, up 6.8% month on month. We think it was mainly driven by PCB equipment; gross profit margin of 39.51%, with slight fluctuations from quarter to quarter; credit impairment loss of 9.34 million yuan, which we believe was mainly calculated in accordance with accounting standards; net profit to mother was 0.054 billion yuan, which we believe increased 18.9% year over year and decreased 10.8% month on month, excluding sales expenses After the effects of quarterly fluctuations and credit impairment losses, etc., the trend was basically the same as revenue.

Considering that the company's pan-semiconductor equipment mainly confirmed revenue in the fourth quarter, we expect the company's 4Q24 revenue to grow rapidly month-on-month. Downstream production of PCBs, expansion of VC board production, and advanced packaging are expected to continue to drive the company's performance growth in 2025.

Profit forecasting and valuation

We basically keep the company's profit forecast unchanged. We expect the company's revenue to increase 32.7%/30.2% year on year to 1.1/1.432 billion yuan in 2024/2025, and net profit to mother will increase 32.8%/39.1% year on year to 0.238/0.331 billion yuan. The P/E valuation method was used to value the company. The current stock price corresponds to 2024/2025 40.0x/28.8x P/E, keeping the target price unchanged at 72.80 yuan, corresponding to 2024/2025 40.2x/28.9x P/E, which is basically the same as the current price, keeping the outperforming industry rating unchanged.

risks

Downstream capital expenditure cyclical/new product verification falls short of expectations/fierce market competition/core component supply chain.