Wanye Enterprise is a leading semiconductor ion implanter company in China. The company is mainly engaged in R&D, production, sales and technical services of integrated circuit core equipment and real estate business. The company's subsidiaries, Kaishitong and Jiaxin Semiconductor, are mainly engaged in integrated circuit core equipment business. The core equipment business involved in Kaishitong is a high-tech project integrating R&D and manufacturing with ion implantation technology as the core. Its main business is R&D, production and sales of internationally leading high-end ion implanters, focusing on semiconductor integrated circuits and other fields. Current revenue includes self-developed ion implanters, ion implanter consumables, and product and service customization and remanufacturing business. The product range involved in Jiaxin Semiconductor covers various types of semiconductor front-end equipment such as etching machines, thin film deposition, and rapid heat treatment. The company focuses on the development opportunities of localization of integrated circuit equipment, is committed to localizing R&D and manufacturing of core equipment and supporting equipment for mainstream and mature manufacturing processes, and provides a complete set of advanced equipment solutions for integrated circuit wafer manufacturers such as automotive chips, power chips, and logic chips. In 2023, the company achieved main business revenue of 965 million yuan (-16.67% YoY), net profit of 151 million yuan (YoY -64.32%); with 2024Q1, the company achieved main business revenue of 99 million yuan (YoY -20.24%) and net profit to mother of 0.05 billion yuan (-94.10% YoY).

The company's ion implanter models have been continuously improved, and customer certification of new products has been successful. On the one hand, Kaishitong, an important holding subsidiary of the company, is continuously improving existing equipment products and developing new products. The low-energy high-beam series products and high-energy ion implanters continue to be improved and iteratively upgraded, and comprehensive performance performance such as process coverage, yield, and capacity replacement rate is continuously optimized. It is a domestic supplier that has achieved full coverage of the 28nm low energy ion implantation process, and has taken the lead in completing the verification and acceptance of domestic high-energy ion implanters to continuously expand users. Based on existing general platform technology and the foundation of industrialization, Casteon is developing a full range of ion implanter products, including large beam injectors for CIS, medium beam displacer injector, hydrogen ion large beam injector, and high-temperature ion implanter for silicon carbide. 2024Q1, Casteon released a large beam ion injector for the CIS. The product received an order from the customer in 2023Q4 and delivered to the customer in March 2024. On the other hand, the overall performance of Kaishitong equipment in mass production lines for key fab customers continues to improve. The excellent performance of the product equipment and the efficient and professional service capabilities of the service team helped Kaishitong's high-end ion implanter series products develop many new 12-inch fab customers in 2023, and many ion implanter equipment products have been repeatedly purchased by important fab customers. 2024Q1 Casteon shipped a total of 8 ion implanter equipment to a number of repeat order customers, and several new customer orders were added in April. Since 2023, Kaishitong has produced and delivered a variety of high-end ion implanter products, added a number of 12-inch chip wafer manufacturers to customers, and added orders of more than 270 million yuan, covering various application fields such as logic, storage, power, and image sensors.

The product layout of Jiaxin Semiconductor is perfect, and new orders are growing rapidly. The company's subsidiary Jiaxin Semiconductor has formed a number of semiconductor front-line core equipment product lines. The business covers various types of main process equipment such as etching, thin film deposition, rapid heat treatment, etc., as well as supporting process equipment such as exhaust gas treatment, etc., to provide complete front-end equipment solutions for integrated circuit wafer manufacturers such as automotive chips, power chips, and logic chips. In recent years, Jiaxin Semiconductor has continued to lay out the mature equipment market, continuously expanding its footprint in terms of R&D and production of core integrated circuit equipment. With the completion of the Jiaxin Semiconductor's integrated circuit equipment R&D and manufacturing base, it has formed one of the most important integrated circuit front-end equipment R&D and manufacturing bases in East China with a new production capacity of 140,000 square meters of land, helping to consolidate the company's “1+N” semiconductor equipment product platformization strategy.

The PHOEBUS PVD equipment developed in-house by the company's Jiaxin Semiconductor has higher accuracy and flexibility, can meet the diverse process needs of customers, and has both 12 inch and 8 inch architectures. On the path of focusing on R&D, Jiaxin Semiconductor continues to move forward. In August 2023, it signed a strategic cooperation agreement with the Jiashan Fudan Research Institute to work together to strengthen scientific research investment and talent building, and achieve industry-university-research integration. At the same time, Carson Semiconductor is developing a series of new products and processes to provide continuous impetus for autonomous and controllable core equipment. From 2023 to April 27, 2024, Jiaxin Semiconductor added more than 130 million yuan in new orders, and received a total order amount of about 470 million yuan since establishment.

Profit forecasting, valuation and ratings: Due to the shift in the company's business development focus to semiconductor equipment and the real estate business shrinks, we lowered the 24-25 net profit forecast to mother of 170.70/204 million yuan (down ratio was 72.80%/69.32%), and added a 26-year net profit forecast of 227 million yuan. The current market value corresponds to PE valuation 71/59/53 times. The company's ion implanter products have been successfully verified by customers. Jiaxin Semiconductor lays out various types of semiconductor equipment such as etching, thin film deposition, and rapid heat treatment. We are optimistic about the company's long-term development prospects and maintain the company's “buy” rating.

Risk warning: Risk of price fluctuations of upstream raw materials, risk of product or customer introduction progress falling short of expectations, risk of downstream demand falling short of expectations.