Company Overview

The company has been deeply involved in the field of semiconductor cleaning for more than 20 years, and has an outstanding position in the industry. Established in 2001, MeiAir Technology has been deeply involved in the cleanroom field for more than 20 years. The downstream focus is on semiconductors, biomedicine, public health, etc. It is the leading domestic electronic semiconductor cleanroom air filter equipment. The core products are FFU (fan filter unit) and filter products, accounting for 86.25% of revenue in 2023. The actual controller of the company is Mr. Jiang Li, who holds 54.04% of the company's shares; the company's core team has 5 foreign members, and the management has international management experience.

Financial indicators showed good performance growth, and equity incentive targets showed management confidence. In recent years, benefiting from the acceleration of global semiconductor production capacity construction, the company's revenue and profit have entered a period of high growth. The CAGR for 2017-2023 was 24% and 40%, respectively.

Thanks to the scale effect, the company's expense ratio continued to decrease after 2018, and the net profit margin continued to grow. The net profit margin for the first three quarters of 2024 was 12.32%, the highest level in history. At the same time, the company's contract debt level for 2020-2023 increased year by year, showing the overall growth trend of the company's orders. In 2024, the company issued an equity incentive plan, which targets an annualized revenue increase of at least 30% from 2024-2026, demonstrating that management has strong confidence in performance growth.

There is heavy snow in the air filtration industry, and demand for semiconductors at home and abroad is expected to resonate and the downstream sector continues to expand. Clean rooms are an important part of semiconductor manufacturing. With industrial upgrading in fields such as semiconductors and biomedicine, demand for clean rooms in China continues to grow. According to Sullivan data, China's clean room equipment market will rise to 140 billion yuan in 2024, an increase of nearly 50% compared to 2019; it is predicted that the air filter market for its core equipment is expected to reach 15 billion yuan in 2025. The cleanliness level of a clean room can be divided into classes 1-9 from high to low. The clean level directly affects product yield and is essential in semiconductor manufacturing.

Demand for semiconductors at home and abroad resonates, and the country is expected to enter a long-term boom cycle. In the short term, China's semiconductor production capacity construction is expected to accelerate, driving a recovery in semiconductor equipment spending in 2024; in the medium to long term, mainland China is expected to become the world's largest IC wafer production capacity construction site in 2026, and China's semiconductor industry is expected to enter a long boom cycle. Globally, as AI and other fields drive growth in downstream demand, it is estimated that the new global production capacity of 8-inch wafers will reach 23.1 million in 2025, a record high. At the same time, due to changes in the international geographical landscape and industrial environment in recent years, the trend of the semiconductor industry moving to Southeast Asia is becoming more and more obvious, and many international semiconductor giants have already established a presence in Malaysia.

“Equipment+consumables” drive performance growth in parallel, and “endogenous+extension” welcome the boom cycle, companies bind leading customers in the industry, and benefit from increased industry concentration and replacement of consumables for a long time. At the product strength level, the core parameters of the company's FFU products, such as efficiency level and resistance, can be compared to the world's top brands. In terms of market position, the company has a market share of about 30% in the field of newly built semiconductors in China; cooperating domestic customers are all leading companies in the industry, supplying first-tier manufacturers such as SMIC, BOE, and Huaxing. Considering that advanced semiconductor processes will further drive demand for high-grade clean equipment, the company's market share is expected to increase further as an industry leader. At the same time, the company's products have consumables logic. The filters supplied by the company need to be replaced regularly, and the gross margin is above the gross margin level of the equipment by 10 PCT; as the number of equipment users in stock grows, the revenue share of the company's filters is expected to increase steadily, thereby increasing the company's profits.

Actively develop a global layout and welcome the new semiconductor cycle with “endogenous+extension”. The company is actively expanding production capacity at home and abroad, and currently has 9 production bases worldwide (7 domestic and 2 overseas). The company is actively exploring overseas markets. The overall share of overseas revenue has been growing in recent years. 2024H1 is 18.50%. In terms of epitaxial mergers and acquisitions, the company is expanding its industry chain vertically around semiconductor clean rooms, and announced in October 2024 that it plans to acquire Hong Kong stock listed company Jiexinlong. With this acquisition, the company's products will be extended to the field of clean room walls and ceilings, and it is expected that customer resources in Southeast Asia will be further integrated.

Profit forecast: The company is a well-known supplier of domestic fan filter units and filters. It has mature supply experience and a high market position in the semiconductor field. The company has profoundly benefited from the acceleration of domestic and overseas semiconductor construction cycles and the wave of domestic replacement of equipment in the semiconductor sector in China. We predict that the company's net profit for 2024-2026 will be 0.21, 0.27, and 0.35 billion yuan, respectively. The corresponding PE will be 23.7, 18.4, and 14.2 times, respectively, covered for the first time, and given an “increase in wealth” rating.

Risk warning: risk of business concentration, risk of falling short of expected fund-raising capacity, geopolitical risk, risk of information used in research reports not being updated in a timely manner, risk of deviation in industry size estimates.