Introduction to this report:
As a leading company in etching silicon materials, the company leverages its deep talent and technical foundation to expand silicon components vertically and lay out semiconductor silicon wafers horizontally, further opening up room for growth.
Key points of investment:
It was covered for the first time, and a “increase in holdings” rating was given. As a leader in etching silicon materials, the company's main business is expanding production in a countercyclical and forward-looking manner. The two major new businesses of silicon components and silicon wafers are progressing steadily, adding new business volume as the semiconductor cycle reverses, and performance is flexible. The company's 2023-2025 EPS is expected to be -0.18, +0.40, and +1.01 yuan. The target price is 47.66 yuan based on comparable company valuations.
The leading barrier of etched silicon materials is firm, and silicon components are arranged in an integrated manner according to the trend. Continued breakthroughs in advanced processes and advancements in multi-layer stacking technology are driving demand for etching consumables. In the silicon materials sector, the advantages of domestic manufacturers are highlighted. Shengong silicon materials continue to lead in cost, and the countercyclical expansion of production has further consolidated its leading position. When it comes to silicon components, foreign manufacturers still dominate. Domestic substitution of downstream equipment and foundry is accelerating. The company follows the trend of vertical layout and differentiation in positioning the domestic market. The design capacity is leading in the country, and verification is progressing smoothly.
With its deep talent and technical advantages, it has expanded horizontally into the semiconductor silicon chip industry. In line with the wave of localization, the domestic semiconductor silicon wafer market is growing strongly, and domestic manufacturers are actively expanding production. With the versatile and consistent technical foundation accumulated in the main business and the core team with more than 20 years of silicon wafer production experience in Japan, the company is steadily advancing the 8-inch light-mixed low-defect polishing silicon wafer project. Currently, in the first phase, the production capacity of 50,000 wafers per month is climbing, gradually shifting from companion films to certification.
Catalysis: semiconductor cycle inflection point+new business expansion double click. As the semiconductor industry cycle reverses, the company's main business is highly flexible. At the same time, the company's silicon components and silicon wafer business customer acquisition work continues to advance, and we are about to enter a period of performance growth.
Risk warning: Upstream raw material price fluctuations, semiconductor cycle fluctuations, new business verification falling short of expectations