Description of the event
The company released its 2021 annual performance forecast. It is expected to achieve net profit of 120-140 million yuan in 2021, an increase of 102.18%-135.88% over the previous year, after deducting non-net profit of 0.75-85 million yuan, an increase of 45.58%-66.13% over the previous year.
Core views
Localized scribing machines have been sold in bulk, and the semiconductor equipment layout has entered a harvest period. In 2021, the company's localized semiconductor dicer 8230 successfully achieved mass sales and was recognized by leading packaging and testing companies. This indicates that through overseas acquisitions, R&D bureaus, and accumulation over a long period of time, the company already has the ability to fully automate scribing machine equipment and has an advantage in competition with overseas leaders. We believe that after completing the acquisition and control of LP (inventor of the dicing machine), LPB (core spindle supplier) and ADT (the world's third largest dicter supplier), the company has successfully built a team with a strong R&D team+core component technology+mass production and delivery capabilities. The layout of the semiconductor equipment field has begun to take shape, and it is expected that the future will enter a period of rapid growth and harvest through the rapid release of localized models.
Downstream production is actively expanding, and overseas leaders are out of stock, and domestic equipment ushered in the best time window for import substitution.
According to SEMI statistics and forecasts, in 2021-2023, the total size of the packaging equipment market reached 21.3 billion US dollars. Compared with 2018-2020, an increase of 10.6 billion US dollars, the scale has nearly doubled, and downstream production expansion is very positive. At the same time, Disco, a leading Japanese dicter, accounts for more than 70% of the global market share, but due to limited production capacity due to conservative expansion of production, the current backlog of orders and delivery delays is very serious. We believe that this year will be the most critical year for the company to rapidly replace domestic production and increase its share. If the parameters of local equipment are fully benchmarked and the price is advantageous, the company is expected to win the favor of downstream customers and achieve high growth in obtaining batch orders.
Hold the trump card of the core air spindle and actively build a semiconductor equipment component platform. Through the acquisition of LPB, the company has mastered the R&D and production process of the air spindle, the core component of the dicer, making the company the only supplier in the world that has both a core spindle and energy production equipment in China. In addition to dicing machines, the company's spindles can also be applied to other key semiconductor equipment such as grinders, ion implantation, CMP, etc., and is a potential component supplier for domestic semiconductor equipment in the future. The company is actively expanding production capacity of scanners and spindles through fixed increases and convertible bonds. It is expected that new growth space will be opened up through spindles in the future, and platformization capabilities will gradually become apparent.
Profit forecasts
Maintain a “buy” rating. We expect the company's net profit for 2021-2023 to be 126 million, 2.52 million and 390 million yuan respectively, and the corresponding EPS is 0.47, 0.94 and 1.45 yuan respectively. The current stock price corresponds to the 2021-2023 PE value of 68.06, 33.84, and 21.90 times, respectively. We are optimistic that the company's self-developed localized segmentation models and consumables will benefit from factors such as technological breakthroughs and cost reductions to rapidly enhance its competitive advantage. In the face of rapid industry growth and insufficient production capacity of leading overseas companies, we will also rely on self-development and expansion of air spindles for core components to further build a core equipment platform for semiconductor components and open up space for future growth.
Risk warning
The semiconductor packaging and testing industry is growing, the production capacity of scribing machines and spindles is expanding, and competition in the industry is fierce.