Based on the precision manufacturing industry, the company focuses on the field of MEMS fine microelectronic components and semiconductor chip test probes. Benefiting from the continuous improvement of the prosperity of the industry, the company actively grasps the opportunities for the development of the industry. on the one hand, the sales orders of the company's MEMS fine and micro parts series are full, the production capacity is constantly released, and the revenue and net profit are both year-on-year growth. On the other hand, after early customer expansion and product verification, the company's semiconductor test probe business successfully entered the supply chain system of overseas chip designers, with a substantial increase in newly signed orders compared with the same period last year. At the same time, the company's MEMS wafer-level and substrate-level test probes are expected to raise funds this year, with the goal of breaking foreign monopolies and bringing the company a second growth curve. Maintain the target price of 148 yuan and maintain the "buy" rating.

The increase in fees put a little pressure on the profit end of Q4, but did not change the long-term growth trend. On January 26, 2022, the company issued an annual performance forecast that it is expected to achieve a net profit of 98 million yuan to 110 million yuan in 2021, an increase of 59.61% to 79.15% over the same period last year. It is estimated that the net profit of deducting non-return in 2021 is between 87 million yuan and 99 million yuan, an increase of 44.04% to 63.91%. The company's 2021Q4 profit growth rate was slightly lower than expected, mainly due to the following two reasons: with the outbreak of semiconductor test probe business in 2021, the company increased management expenses to reward relevant employees; in semiconductor test probe business, the company actively introduced new customers, and in order to meet customer needs, the company accelerated research and development and production expansion progress leading to R & D expenses. Looking forward to 2022, the company's semiconductor test probe business after early customer development and product verification, is expected to achieve rapid client volume, the company's performance may exceed expectations.

There is an urgent need for a breakthrough in the field of high-end probes, and there is a huge alternative With the chip manufacturing process getting smaller and smaller, the wafer foundry technology is becoming more and more advanced, and the testing technology is also constantly improving. as a consumable material in the testing stage, the probe should also have the characteristics of high precision, high output, long life and good consistency. At present, the high-end field of test probes has always been monopolized by foreign countries. According to VLSI Research, China's consumer market for probe cards accounted for 12.5% of the world in 2020, but domestic suppliers accounted for only 1.1% of the global market. China's base consumer market accounted for 17.0% of the world, but domestic suppliers accounted for only 4.4% of the global share. At present, the company increases its R & D investment in the field of high-end test probes, aiming to break the monopoly of foreign enterprises in this field and fill the domestic gap.

The company increases the layout of semiconductor test probe products to enhance the overall competitiveness of the company. According to VLSI data, the global probe card market in 2020 was US $2.206 billion, an increase of 19.94% over the same period last year, and the global MEMS probe card market accounted for 65.8% of the probe card market with a sales volume of US $1.451 billion. Due to the late entry of domestic manufacturers, the market share is monopolized by foreign enterprises. Based on the company's years of process technology accumulation in the field of precision manufacturing and deep participation in the global semiconductor industry, the company will develop MEMS wafer-level and substrate-level test probe products. The R & D cycle of the project is expected to be 2 years. After it is put into production, it can enrich the company's existing probe product line and enhance the company's overall industry competitiveness in the probe field. In addition, with the release of production capacity of fund-raising projects, the company will stimulate new performance growth points and further improve the competitiveness of the global market.

Risk factors: the risk of high customer concentration; the risk of trade disputes; R & D progress is not as expected.

Investment suggestion: the company has been based on the precision manufacturing industry for more than 10 years, and the quality rate, manufacturing accuracy and capacity scale are in the forefront of the country. The company's customers are mainly international leading companies in consumer electronics and semiconductors, and their products are widely recognized in the market. Benefiting from the continuous growth of downstream demand for consumer electronic products and the accelerated process of domestic replacement of semiconductor chip test probes, the company actively seizes the development opportunities of the industry, opens up customers, expands production capacity, and realizes its own rapid development. In view of the fact that the company's investment in research and development and other management expenses has increased in order to quickly enter the new technology field, the company has adjusted its EPS forecast from 2021 to 2023 to 1.31max 1.99max 2.83 yuan (the original forecast value 1.62max 2.46max 3.64 yuan). The extension of the new technology will further stabilize the company's position and competitiveness in the domestic probe industry and contribute to the expansion of overseas markets, so the target price will be maintained at 148RMB, corresponding to 75 times PE in 2022. Maintain a "buy" rating.