Key investment points

Emerging domestic sealing and testing plants to actively explore market customers

The company's products are all high-end packaging forms such as QFN, LGA, BGA, FlipChip, Bumping, WLCSP, etc., and are widely used in RF front-end chips, AP SoC chips, touch chips, WiFi chips, Bluetooth chips, MCU and other IoT AIOT chips, power management chips/supporting SoC chips, computing chips, etc., and its main partners include Jingchen Semiconductor, Aojie Technology, Weijie Chuangxin, MediaTek, Fuhanwei, Xingchen Technology, Zhongke Lanxun, etc. The core team members all have more than 10 years of experience in the packaging and testing industry. They can respond in a timely manner according to the customer's various packaging testing requirements, and customer recognition continues to increase.

Demand for AI innovation is stimulated, and the supply of advanced packaging is empowered

Demand-side AI phones, AI PCs, smart headphones, and smart glasses represent AI hardware innovation and will help the industry gradually recover and develop. Supply-side advanced packaging has become the main increase in global packaging and testing, and multi-dimensional heterogeneous packaging represented by 2.5D/3D packaging will become the fastest growing field for advanced packaging. According to Yole's forecast, the share of global advanced packaging in the global packaging market will rise to nearly 50% by 2025. The 2019-2025 CAGR is about 6.6%, and the growth rate is far higher than traditional packaging. At the same time, benefiting from the explosion of demand for high-computing power chips in artificial intelligence and large model applications, 2.5D/3D packaging will become the fastest growing field for advanced packaging. Its market size is expected to grow to 22.5 billion US dollars by 2028, and the 2021-2028 CAGR is about 15.66%.

Continue to increase investment in R&D and actively lay out advanced packaging

Since its establishment, it has insisted on independent research and development, and has focused on technological innovation and process improvement in the field of advanced packaging, and has now formed a “Bumping+CP+FC+FT” one-stop delivery capability. In 2024, the “Multi-dimensional Heterogeneous Advanced Packaging Technology R&D and Industrialization Project” will be issued to unspecified targets, and R&D and industrialization in the fields of RWLP, HCOS-OR, HCOS-OT, and HCOS-SI/AI will be carried out on the basis of the company's industrialized Bumping and RDL, which will help the company enhance its advanced wafer-level packaging R&D and industrialization capabilities, enhance technological competitive advantage and continuous profitability.

Profit forecasting and valuation

The company's 2024-2026 revenue is expected to be 3.269/4.206/5.158 billion yuan, respectively, with a year-on-year growth rate of 36.72%/28.67%/22.62%; net profit to mother is 0.077/0.169/0.322 billion yuan, and the year-on-year growth rate is turning a loss into profit/ 118.95%/90.80%. The PE corresponding to the current stock price is 177.5/81.1/42.5 times, and EPS is 0.19/0.41/0.79 yuan. Consider the company's active layout in advanced packaging fields such as fan-out packaging and 2.5D/3D packaging; deepening cooperation with existing customer groups such as Jingchen Semiconductor, Aojie Technology, Hengxuan Technology, Fuhanmicro, and Xingchen Technology to actively expand new customers. As production capacity continues to be released in the future, the company is expected to benefit the core of AI to accelerate the development of advanced packaging and the major trend of autonomous control, so it will be given a “buy” rating.

Risk Alerts

Downstream demand falls short of expectations, increased market competition, failure to develop and upgrade products or technologies falling short of expectations, operating risks of fund-raising projects, etc.