2023 年靶材业务营收16.7 亿元，对应全球市占率约为18.6%。溅射靶材中，铜锰靶材制造难度高、高端芯片需求量大，过去主要由日本厂商垄断，近年来江丰电子在铜锰靶材领域实现突破，铜锰靶材在公司靶材业务营收中占比逐步提升，未来有望拉动溅射靶材业务毛利率提升。Key points of investment:
Wafer is a domestic leader in manufacturing metal sputtering targets, expanding semiconductor components to maintain rapid growth. Jiang Feng Electronics specializes in semiconductor materials for sputtering targets used in front-end wafer manufacturing. In recent years, it has rapidly deployed the semiconductor component business. Target materials account for 66% and components account for 24% of 1H24's revenue. The compounded revenue growth rate of the company reached 33% from 2019 to 23, and the compound growth rate of net profit to mother reached 41%; 9M24 had a gross margin of 30% and stable profitability; the company used to focus on overseas business. In recent years, along with the wave of autonomous and controllable domestic wafer manufacturing, mainland China's revenue share increased to 58% of 1H24.
The market share of sputtering targets is the top two in the world, and high-end products continue to be replaced by domestic products. Jiang Feng's electronic target business supplies global wafer factory customers. According to SEMI, the global sputtering target market size in 2023 is about 1.25 billion US dollars, equivalent to about 9 billion yuan.
The target materials business revenue in 2023 was 1.67 billion yuan, corresponding to a global market share of about 18.6%. Among sputtering targets, copper-manganese targets are difficult to manufacture, and high-end chips are in high demand. In the past, they were mainly monopolized by Japanese manufacturers. In recent years, Jiang Feng Electronics has achieved breakthroughs in the field of copper-manganese targets. The share of copper-manganese targets in the company's target business revenue is gradually increasing, and the future is expected to drive an increase in the gross margin of the sputtering target business.
The semiconductor component market has exploded and grown under autonomous and controllable requirements, and mechanical components have a broad market space. According to SEMI, the scale of production expansion in mainland China will continue to expand in 2025, with a further 8% year-on-year increase over 2024, corresponding to the increase in semiconductor equipment market space. The trend of domestic autonomy and control in the semiconductor industry is gradually extending upstream in the industrial chain. To solve the “stuck neck” problem, it is ultimately necessary to complete domestic replacement of semiconductor equipment components. According to Jiang Feng Electronics' annual report, the semiconductor equipment components market in mainland China is estimated to be 114.1 billion yuan in 2022, with mechanical components accounting for the highest share.
Jiang Feng Electronics' core component products were rapidly released, and the second growth curve formed a trend. In the downstream semiconductor equipment market, etching and thin film deposition account for more than 40% of the total value, and the market space is broad. Jiang Feng Electronics benefits from the technology, experience and customer advantages accumulated in ultra-high purity metal sputtering targets for semiconductors, and quickly discharges core products such as shower heads and silicon electrodes for thin film deposition and etching equipment. The company's parts business revenue in 2022 and 2023 was 0.36 billion yuan and 0.57 billion yuan respectively, up 95% and 59% year-on-year. 1H24 parts revenue accounted for 24%, gradually increasing its contribution to the company's revenue growth.
Investment analysis opinion: First coverage gives the company a “buy” rating. The company's revenue for 2024-2026 is expected to be 3.3, 4.09, and 5.01 billion yuan, respectively, with corresponding growth rates of 26.8%, 24.0%, and 22.6%, respectively, and net profit to mother of 0.364, 0.484, and 0.644 billion yuan respectively. The corresponding year-on-year growth rates are 42.3%, 33.0%, and 33.2%, respectively, corresponding to the 2024-2026 dynamic PE of 57, 43, and 32 times, respectively. PE valuation was used and the company was given 70.5 times PE in 2024, corresponding to 24.5% of the space, covered for the first time, and given a purchase rating.
Risk warning: The scale and pace of production expansion in the fab falls short of expectations, and the capacity utilization rate of the fab falls short of expectations.