鼎龙股份(300054):半导体材料龙头业绩向好 新产品多点布局进展持续亮眼

Dinglong Co., Ltd. (300054): Leading semiconductor materials performance is improving, and the multi-point layout of new products continues to be impressive

安信證券 ·  04/14  · Researches


On April 11, 2023, the company released its 2022 annual report. The company achieved revenue of 2,721 million yuan in 2022, an increase of 15.52% over the previous year; achieved net profit of 399 million yuan, an increase of 82.66% over the previous year; and achieved net profit of 348 million yuan after deduction, an increase of 68.47% over the previous year.

Outstanding performance throughout the year, increased profitability and improved cash flow:

The company's performance in '22 was impressive, with revenue of 766 million yuan for 22Q4 alone, YOY +8.72%, QOQ +19.16%; achieving net profit of 95 million yuan, YOY +51.37%, and QOQ -5.05%.

Continued revenue growth is mainly due to the fact that CMP polishing pads achieved annual sales revenue of 457 million yuan, yoy +51.32%, and the beginning of sales of CMP polishing liquid, cleaning solution products, and flexible display materials YPI and PSPI products. The increase on the profit side was significant, mainly due to factors such as increased profit from CMP polishing pads, increased gross margin in the consumables sector, and exchange rate changes. The gross profit margin for the whole year was 38.09%, an increase of 4.65 pcts over the previous year; the net profit margin was 16.69%, an increase of 6.29 pcts over the previous year. Expense-side sales and management expenses increased slightly year-on-year; R&D expenses increased 23.92% year-on-year, mainly due to increased R&D investment in the optoelectronic semiconductor business, and negative financial expenses due to increased exchange earnings. The R&D expense ratio increased by 0.78 pct over the same period last year, and the sales/management/finance expenses ratio all declined slightly due to the increase in revenue scale. Operating cash flow increased 17940.66% year-on-year, mainly due to factors such as increased sales of businesses such as polishing pads and general consumables for printing and copying, which led to an increase in the scale of cash revenue and delays in payment of some taxes and fees. R&D investment was 318 million yuan, or YOY +12.26%, mainly due to increased new product development efforts and unprofitable business related to new materials. Revenue growth is expected in the future in the fields of new materials such as YPI, PSPI, and chip packaging adhesives.

Leading CMP companies have deployed new semiconductor materials at multiple locations, and domestic alternatives continue to penetrate:

The company leverages the advantages of a platform-based enterprise to improve the performance of traditional general consumables for printing and copying. At the same time, it has developed innovative “stuck” imported innovative materials such as semiconductor CMP process materials, display materials, and advanced packaging materials, and continues to expand market space. The revenue scale of semiconductor materials increased 69.93% year over year, and the revenue share increased by 6.14 pcts. According to the production capacity plan, it is expected that volume will be released and revenue will be generated one after another starting in the second half of '23. Look by product:

(1) Semiconductor CMP process materials: In terms of CMP polishing pads, the annual production capacity of new products of 200,000 pieces will be gradually increased in the future. According to the announcement, the Qianjiang Phase III production expansion project for new polishing pads and raw materials for core components was officially put into trial production in 22Q3. Orders for new products were obtained in Q4, making it the number one supplier for most mainstream domestic fabs and other customers. In terms of CMP polishing liquid and cleaning solution, sales revenue of 17.89 million yuan in '22 was 17.89 million yuan. A number of products have been sold on a large scale. The rest of the products have entered the critical verification stage. For example, polysilicon polishing liquid, metal gate polishing liquid, etc. are in the final introduction stage, and it is expected that 23H2 will receive new orders. The Xiantao Optoelectronics Semiconductor Materials Industrial Park has an annual output of 10,000 tons of CMP cleaning solution expansion project, an annual output of 20,000 tons of CMP polishing liquid, and a supporting expansion project for grinding particles are expected to be completed and put into operation in 2023. The rate of product release is expected to accelerate further.

(2) Semiconductor display materials: YPI, a soft display material, received G6 orders from various core customers. PSPI broke the monopoly and began mass sales from 22Q3, and the rest of the new products continued to be developed and verified. The second phase of the PSPI expansion project with an annual production capacity of 1,000 tons in Xiantao Industrial Park is expected to achieve large-scale mass production in mid-2023, which is expected to further enhance the volume capacity of PSPI products and the company's competitiveness.

(3) Advanced semiconductor packaging materials: The focus is on three types of temporary bonding adhesive (TBA), encapsulating photoresist (PSPI), and underfill (Underfill). Temporary bonding adhesive is in the mass production introduction stage, encapsulating photoresist is in the verification stage after sample delivery is completed, and the underfiller is expected to be sampled 23H2. In terms of capacity construction, 23Q2 is expected to produce a total of 110 tons of 2 temporary bonding adhesives, and 2023H2 will achieve a production capacity of 40 tons per year for 2 types of encapsulated photoresists.

Investment advice:

We expect the company's revenue from 2023 to 2025 to 3,547 million yuan, 4,373 billion yuan, and 5,533 million yuan respectively, net profit of 552 million yuan, 734 million yuan, 996 million yuan, EPS of 0.58 yuan, 0.77 yuan, 1.05 yuan, and corresponding PE is 44 times, 33 times, and 24 times, maintaining the investment rating of Buy-A.

Risk warning: fluctuations in the macroeconomic environment; intensification of industrial competition patterns; policy changes and uncertainty in the trade situation; changes in downstream customer demand; inventory levels in the consumables business are too high; progress of new products falls short of expectations; capacity expansion falls short of expectations, etc.

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