1H24 results are in line with our expectations

The company announced 1H24 results: The company achieved operating income of 1.267 billion yuan, a year-on-year increase of 26.22%, and net profit to mother of 0.129 billion yuan, an increase of 3.64% year-on-year, in line with our expectations.

Development trends

2Q24 revenue and profit increased significantly month-on-month, and profitability continued to improve: 2Q24 achieved operating income of 0.795 billion yuan, YoY +32.22%, QoQ +68.53%, realized net profit of 0.119 billion yuan, YoY +67.43%, achieved net profit excluding net profit of 64.1667 million yuan, YoY +40.90%, which significantly reversed losses from month to month. The net profit margin recovered to 14.9% in the single quarter, mainly because 2Q24 shipping machines achieved revenue one after another The transformation was also caused by a decrease in management expenses and R&D expenses. At the same time, according to the company's semi-annual report, the company signed a significant month-on-month increase of new orders in 2Q24, and 1H24's shipping amount was 3.249 billion yuan, an increase of 146.50% over the previous year.

The coverage of film equipment continues to expand, and new products have been introduced and verified one after another: According to the company's semi-annual report, the company further expanded the coverage of film processes such as PECVD, ALD, SACVD, and HDPCVD, etc., and the new products and processes launched, such as high-depth-to-width ratio groove filling CVD, PE-ALD SiN process equipment, HDPCVD FSG, and HDPCVD STI process equipment have all passed customer verification. At the same time, the company independently developed and launched PECVD Bianca process equipment, which is mainly used for correction of wafer warpage and wafers Back protection, as of 1H24, the company has received orders for more than 25 PECVD Bianca process equipment reaction chambers; in addition, the first high-depth-to-width ratio groove-filled CVD product independently developed and launched by the company passed customer verification and achieved industrial application.

Wafer bonding equipment has been industrialized and expanded to the field of advanced packaging: The company's wafer-to-wafer bonding product Dione 300 and the chip-to-wafer hybrid pre-surface pretreatment product Propus have all received repeated orders. Furthermore, the company has independently developed bonding registration accuracy measurement products, which can measure the bonding accuracy after wafer-to-wafer hybrid bonding and chip-to-wafer hybrid bonding, and has received orders from customers.

Profit forecasting and valuation

We keep the company's profit forecast unchanged. We expect the company to achieve operating income of 4.087/5.362 billion yuan in 2024/2025 and achieve net profit of 0.886/1.296 billion yuan. The current stock price corresponds to the company's 38.7/26.4x P/E in 2024/2025. We used the forward P/E valuation method to value the company, maintaining the 2027 valuation to 25x P/E and discounting, keeping the target price unchanged at 145.6 yuan (after exclusion), corresponding to the company's 2024/2025 45.8/31.3x P/E. There is still 18.4% room to rise from the current stock price, maintaining the outperforming industry rating.

risks

Fab capital expenses have declined, new product development falls short of expectations, and supply risks for key components.