Key investment points

Accelerate the replacement of semiconductor equipment with domestically produced components made of advanced ceramic materials. The company was founded in 2009 and is mainly engaged in R&D, manufacturing, sales and service of advanced ceramic material components and surface treatment services for pan-semiconductor equipment. It has an advanced ceramic basic material system composed of six categories of materials: alumina, zirconia, aluminum nitride, silicon carbide, yttrium oxide and titanium oxide. It is a leading enterprise for advanced ceramic material components for semiconductor equipment in China. In the field of semiconductor equipment, the company is a global supplier of leading international semiconductor equipment manufacturer A, and is also a supplier of WATLOW, a world-famous supplier of thermal products and technology solutions. With the trend of localization of semiconductor equipment, the company has become the main core ceramic component supplier for mainstream domestic semiconductor equipment manufacturers, including Beifang Huachuang, Zhongwei, Tuojing Technology, Shanghai Microelectronics, and Xinyuan Micro, providing a guarantee for the supply chain security of China's semiconductor industry. According to Frost & Sullivan data, the global semiconductor advanced structural ceramics market was 25.8 billion yuan in 2021, and will maintain a long-term growth trend along with global semiconductor equipment investment demand. In the semiconductor field, the current level of localization of advanced structural ceramic components in manufacturing equipment used by domestic fabs is still low. According to Frost & Sullivan data, the localization rate of advanced structural ceramic components for semiconductor devices produced in mainland China in 2021 is only about 19%, and there is huge room for domestic replacement. According to Frost & Sullivan data, in 2021, the company accounted for about 14% of the total procurement scale of advanced structural ceramics for semiconductor equipment made in mainland China and about 72% of the total supply scale of advanced structural ceramics suppliers in mainland China. The company will continue to accelerate the domestic replacement process for advanced ceramic material components used in semiconductor equipment.

The ceramic heater began to speed up the discharge. The company's main products and services include advanced ceramic parts, surface treatment and metal structural components. In terms of advanced ceramics, after more than ten years of research and development, the company has mastered key material processes in the manufacture of advanced ceramic materials such as powder formulation and treatment, molding, raw sintering, etc., and has formed its own rich advanced ceramic material system, which has been continuously expanded and improved. At the same time, the company has mastered various processing and manufacturing techniques for hard, brittle and difficult materials, and has successfully applied them to large-scale production of advanced ceramic material components. The company is in a market-leading position among local semiconductor advanced structural ceramic enterprises. At present, it has passed a total of 15 semiconductor equipment component certifications from Company A, including advanced ceramic materials, precision processing and precision cleaning, etc., and has achieved domestic replacement of “stuck neck” products such as high-purity alumina, high-conductivity aluminum nitride, and grading wheels for classifiers to varying degrees, filling the gap between local Chinese companies in the advanced ceramics industry. Many key technical indicators of advanced ceramic material components have reached leading domestic and international standards. In terms of ceramic heaters, by undertaking the “Key Technology and Industrialization of Ceramic Heating Plates for PECVD Equipment” project in the national “02 Project” and years of research and development, the company has now explored the formation of an autonomous and controlled production capacity for ceramic heaters. As of the signing date of the prospectus, this product has been mass-produced, and the company is actively promoting ceramic heater products to mainstream semiconductor equipment manufacturers. In 2023 and before, the company's main products were ceramic structural components used in the field of pan-semiconductor equipment and powder crushing and grading. Beginning in 2024, ceramic heaters began to be released at an accelerated pace. In the first three quarters of 2024, the company achieved revenue of 0.62 billion yuan, of which ceramic components were 0.55 billion yuan (of which the latest mass-produced module products accounted for 36%) and surface treatment was 66 million yuan.

The surface treatment business is growing steadily. In terms of surface treatment, the company has surface treatment capabilities for components such as advanced ceramic materials and metal materials for various substrates such as alumina, aluminum nitride, and yttrium oxide. The company is at the leading level in China in terms of cleanliness of cleaning and regeneration treatment, service life after spraying and spraying large parts, and has a strong ability to provide comprehensive surface treatment service solutions. According to Frost & Sullivan data, the company's share of the display panel surface treatment market in mainland China was about 6% in 2021, with a market share of about 14% in the display panel etching segment. The company's surface treatment business is mainly cleaning and spraying (the company's spraying revenue accounts for a relatively large amount, and surface treatment can be done more than the company's cleaning in the prospectus). The company's main downstream are panel manufacturers, and future demand is relatively stable.

Investment advice

We expect the company to achieve revenue of 0.81/1.061/1.307 billion yuan in 2024/2025/2026, and realized net profit of 0.292/0.412/0.53 billion yuan respectively. The current stock price corresponding to 2024-2026 PE is 102 times, 72 times, and 56 times, respectively, covered for the first time, giving it a “buy” rating.

Risk warning

Technology R&D and marketing risks, operating risks, management and internal control risks, financial risks, industry risks, macro-environmental risks.