Key points of investment:

Leading laser direct writing equipment, technology extension and rapid growth

The company was founded in 2015 and has grown rapidly since its establishment. Its products cover the fields of direct PCB writing, IC carrier boards, advanced packaging, FPD panel displays, IC mask plate making, IC manufacturing, and has also expanded downstream fields such as photovoltaic cells. The company's performance grew rapidly. In 2023, it achieved revenue of 0.829 billion yuan, net profit to mother of 0.179 billion yuan, revenue CAGR of about 42% in 2019-2023, and net profit CAGR of about 39%. Judging from the sources of growth, PCB equipment was the main revenue driver in 2023 and continued to grow. Pan-semiconductor equipment accounts for 23%, but it is growing rapidly. The absolute amount of growth in 2023 surpassed PCB as the main growth force, showing that the company has achieved great results in expanding the field.

PCB field: Product structure upgrade, market demand is growing rapidly. Direct imaging is a major PCB lithography technology. It does not require the use of a negative film. It has technical advantages & cost advantages in the PCB field. High-end PCB manufacturing mainly values its technical advantages, and mid-range and low-end PCBs mainly value its flexibility and cost advantages. From a downstream perspective, the proportion of middle and high-end PCBs such as multilayer boards/HDI versions/package substrates continues to increase, and the level of detail continues to increase, which will lead to an increase in demand for direct writing lithography equipment. In the PCB imaging equipment market, the 2023 global/Chinese sales were USD 0.916/0.494 billion, and the 2018-2023 CAGR was 6.3/ 10.1%. However, Chipboard's PCB equipment revenue CAGR in 2018-2023 was as high as 62%. Alpha was remarkable, mainly due to strategies such as high-end, internationalization, and major customers.

Pan-Semiconductors: Continuing to explore rapidly growing emerging markets

Direct writing lithography is an important market segment for micro-nano lithography. The company's products are mainly used in mask plate manufacturing, IC packaging, FPD manufacturing, etc. For example, in the field of advanced packaging, direct writing lithography has great advantages in rewiring, interconnection, intelligent correction, and large-scale chip packaging, etc., and is expected to benefit from the wave of demand for large AI chips. The company has now delivered many devices to leading companies such as Huatian and Changdian. In terms of new energy photovoltaics, the company seizes the opportunity of the rapid development of copper electroplating routes for N-type batteries to provide customers with core graphical equipment. The monorail production capacity has reached 8,000 pieces/hour, which can meet customer needs. Currently, leading photovoltaic companies have been shipped and recognized, and the future will usher in new expansion space as the industry matures.

Profit forecasting and investment advice

We expect the company's revenue for 2024-2026 to be 1.15/1.56/1.99 billion yuan, net profit to mother 0.267/0.386/0.524 billion yuan, and P/E multiples of 28/19/14×, respectively. We believe that the company is in a leading position in terms of technology, and that the underlying technology has strong platform extension characteristics, giving it a “buy” rating for the first time.

Risk warning

Downstream production expansion progress falls short of expectations, equipment development falls short of expectations, and application development falls short of expectations