Incidents:
On March 14, Jingzhida announced the share repurchase plan. It is proposed to use the company's own capital to repurchase a total of not less than RMB 30 million (inclusive) and not more than RMB 50 million (inclusive), and the maximum repurchase price is not more than RMB 83.57 per share (inclusive). Based on this price, the number of repurchases is approximately not less than 359,900 shares and no more than 598,300 shares, accounting for about 0.38%/0.64% of the company's total share capital, respectively.
Comment: The share buyback shows the company's confidence and has developed steadily and growth1. Semiconductors: Currently, it is a major player in the field of storage testing, and can be expected to grow. Product side: 1) Wafer test systems, mainly probe cards, contributed the main revenue. Revenue in 2022 was about 9.65 million. The probe card business was delivered in batches and accepted by customers in the first half of '23, and the sales scale expanded year-on-year. Probe cards have consumable properties, and the replacement period is 3-12 months. The global scale is about $161 billion in 2022, and is expected to rise to $28.6 billion in 2028. Among them, MEMS probe cards account for 60%. They are mainly used in memory chips, and the localization rate is extremely low. The company has mastered MEMS probe card technology and achieved mass sales in 23 years, and the revenue side is expected to maintain a high growth rate. 2) Aging repair:
Korea's UniTest is the main minority shareholder of Jingzhida Semiconductor, a holding subsidiary of the company, holding 40% of the shares. The two have signed relevant agreements to cooperate in the development of DRAM wafer aging test equipment products and the localized production of DRAM aging repair equipment. The first half of 2023 has completed technology development and testing work and entered the verification stage. 3) Testing machines: Domestic breakthroughs have been made in analog testing machines, but the localization rate of SOC testing machines and storage testing machines is still relatively low. The company has deployed DRAM testing machines. The 2023 semi-annual report shows that the equipment is in the R&D testing stage.
Client: The company is responsible for localization in the field of storage testing. Currently, it has formed good cooperative relationships with Changxin Storage, Zhaoyi Innovation, Payton Technology, Jinhua Integration, Tongfu Microelectronics, and Taiji Industrial. The semiconductor business is expected to grow with the rise of domestic storage.
2. New display testing: The cycle is steadily picking up, and the main business is expected to grow steadily. The company's main business mainly focuses on optical inspection and correction, aging systems, touch detection, signal generators and inspection system accessories in the OLED field. In recent years, with the transfer of the panel industry chain, it has achieved good growth, and its share has increased significantly. In 2020-2022, the company won 45 bids, second only to precision measurement electronics, which won 73 bids. The CINNO Research report shows that the CELL/module testing equipment market is expected to reach 4.6 billion yuan in 2024. As the panel industry cycle steadily recovers, the company's main display business is expected to grow steadily.
Profit forecast and valuation: The estimated 24-25 revenue is 886.1,121 million yuan, yoy +33.54%, 29.44%, net profit to mother of 1.59-212 million yuan, yoy +36.51%, 32.78%, corresponding to PE44 and 33X. The average PE of the three comparable companies in 2024 was 54X. We are optimistic about the growth of the company's semiconductor business and give it a “recommended” rating.
Risk warning: Risk that the panel industry's boom falls short of expectations, risk that the progress of new technology research and development falls short of expectations, risk that product verification progress falls short of expectations, risk of losing core technical personnel, geopolitical risks, etc.