Incidents:
The company released its 2023 annual report. In 2023, it achieved revenue of 22.269 billion yuan, a year-on-year increase of 3.92%; realized net profit attributable to owners of the parent company of 169 million yuan, a year-on-year decrease of 66.24%; and realized net profit deducted from mother of 60 million yuan, a year-on-year decrease of 83.31%.
Looking at Q4's single-quarter results, we achieved revenue of 6.363 billion yuan, up 4.14% year on year and 6.06% month on month; realized net profit attributable to owners of the parent company was 233 million yuan, up 829.63% year on year, up 87.95% month on month; realized net profit without return to mother was 219 million yuan, up 725.82% year on year and 115.55% month on month.
Full-year revenue increased slightly year-on-year, and 23Q4 results continued to improve:
The company's revenue in 2023 increased slightly compared to the same period last year. The main reason is that the company's Suzhou factory and Penang plant continued to strengthen in-depth cooperation with major international customers and other leading companies in the industry, further expand the market share of advanced products, and reap good benefits in various aspects such as market, manpower, and operation. During the reporting period, the company achieved net profit attributable to shareholders of the parent company of 169 million yuan, a year-on-year decrease of 66.24%, mainly due to the phased refinement of industry sentiment, which led to a decline in the company's capacity utilization rate and gross margin. At the same time, in order to further increase its market share and increase procurement of materials and equipment, Tongfu Chaowei Penang made the company's net exposure to the US dollar foreign currency a liability. Coupled with the appreciation of the exchange rate of the US dollar against the RMB in 2023 and the large fluctuation of the Malaysian ringgit against the US dollar, the company experienced exchange losses and reduced net profit attributable to the parent company's shareholders by 190 million yuan. Looking at the 23Q4 single quarter, the company's revenue improved year on year and month on month, net profit achieved significant year-on-year and month-on-month increases, and the company's operating performance continued to improve.
The AI wave is driving demand for advanced packaging, and the company is expected to continue to benefit:
Judging from downstream demand, the AI wave has played a key role in the development of advanced packaging. Currently, the vast majority of AI chip manufacturers around the world use advanced Cowos packages, and TSMC's Cowos production capacity continues to be tight. AMD's MI 300 chip, one of the world's leading AI chips, uses an advanced Cowos package and has continued to be popular since its release. The company is AMD's core packaging and testing factory, and has packaging and testing projects involving the AMD chip Instinct MI300. It is expected to continue to benefit from the continuous increase in demand for advanced packaging driven by AI demand in the future.
Investment advice:
We expect the company's revenue from 2024 to 2026 to be 28.661 billion yuan, 32.73 billion yuan, and 34.858 billion yuan, respectively, and net profit to mother of 998 million yuan, 1,407 billion yuan, and 1,904 billion yuan respectively. Considering the company's leading layout of advanced packaging and deep binding to AMD's major customers, it is expected that AI demand will continue to advance, giving the company an estimated value of PE40.00X in 2024, corresponding to a target price of 26.32 yuan. Give it a “buy-A” investment rating.
Risk warning:
The risk of new technologies, new processes, and new products not being industrialized as scheduled, the risk of industry and market fluctuations, the risk of international trade friction, and the risk of rising product production costs.