Incident: Jingzhida releases three-quarter report

[24Q1-Q3] Revenue 0.566 billion yuan, +52.48% year over year; net profit to mother 0.051 billion yuan, -6.33% year on year; net profit without return to mother 0.041 billion yuan, +31.4% year on year; gross profit margin 36.94%, -2.47 pcts year on year; net profit margin 9.01% year on year, -5.81 pcts year on year.

[24Q3] Revenue 0.205 billion yuan, YoY +65.12%, -26.55% month-on-month; net profit to mother 0.013 billion yuan, -35.10% YoY, -74.98% month-on-month; net profit deducted 0.01 billion yuan, +2.1% YoY, -78.94% month-on-month; gross profit margin 29.83%, YoY -13.47pcts, month-on-month; Net profit margin 6.34%, YoY -9.79pcts, month-on-month- 12.65pcts

The company's revenue increased year on year, while net profit declined year on year, mainly due to: 1) the company's gross margin fell sharply year on year; 2) the 24Q3 government subsidy was 0.67 million yuan, a decrease of 8.83 million yuan compared to 23Q3, which affected the net interest rate of 4.31 pcts; 3) as revenue increased, the cost ratio for the period was diluted year on year. 24Q3 was 23.41%, -12.88pcts year on year.

Storage testing machine: continuous layout creates a second growth curve.

The global semiconductor memory device testing equipment market is about 1.76 billion US dollars. It is mainly occupied by foreign manufacturers such as Edwin and Terada, and the localization rate is low. As local storage fabs actively expand production, it is expected to lay a solid foundation for domestic equipment order growth. As a scarce domestic DRAM testing manufacturer, Jingzhida has successfully developed a universal memory test verifier, and received batch orders and contributed revenue. The development of the wafer tester and FT tester is being carried out according to the plan. Among them, the engineering prototype verification work for the upgraded wafer tester has been completed, and in-factory verification of each key module of the mass-produced prototype has begun; the 9Gbps high-speed front-end interface ASIC chip used in the FT tester and the upgraded wafer tester has completed the first version of the verification test; and the FT tester engineering prototype has been moved to the customer site to enter the verification stage. 24Q1-Q3's semiconductor business revenue increased 106.63% year over year, and the continuous layout ushered in gains.

Panel inspection equipment: Downstream production expansion drives demand and opens up space for new product development.

In 2024, the market size of new display device testing equipment in China will reach 9.2 billion yuan. The company is expected to benefit from downstream capacity expansion and its own new product development dividends. Currently, AMOLED mid-size products are gradually penetrating into IT, automotive, and flat panel display application markets. Manufacturers such as BOE, Vicino, TCL Technology, and Shentianma occupy the vast majority of domestic AMOLED production capacity and continue to invest in the construction of new production lines. The company has completed technical iterations and product upgrades for Cell and Module related testing equipment for the G8.6 AMOLED production line, and is expected to benefit from the dividends of production expansion. At the same time, it has cooperated with core customers to develop G6 generation prototypes for verification in the Array segment, which is expected to open up new incremental space in the future.

Investment advice:

Based on the company's results for the first three quarters, we adjusted the 24-26 profit forecast to 0.11/0.2/0.27 billion yuan (the original forecast net profit for 24-26 was 0.15/0.2/0.27 billion yuan), and the corresponding PE was 72/39/30X. Considering the company's advantages in the field of semiconductor testing equipment and display inspection equipment, as well as the certainty of expanding and upgrading downstream production lines, the company's “buy” rating was maintained.

Risk warning:

Technology development and upgrade iterative risk; increased risk of market competition; risk of deviation in industry size measurement; untimely update of research report usage information.