Key points of investment
Q1 2023 performance: 100% year-on-year increase; expect the company's equipment+materials to be fully released in 2023 1) The quarterly performance exceeded expectations: achieved revenue of 3.6 billion yuan, an increase of 84% over the previous year; Guimu's net profit was 890 million yuan, an increase of 100% over the previous year. The core benefits from the rapid improvement in the performance of photovoltaic long-crystal equipment and photovoltaic crucibles.
2) Profitability remains high: gross profit margin was 40.6%, up 0.7 pct year on year; net profit margin was 28.1%, up 4.5 pct year on year.
3) Orders: As of March 31, 2023, the company's uncompleted contracts for crystal growth equipment and intelligent processing equipment totaled 26.059 billion yuan, an increase of 17% over the previous year. Of these, uncompleted semiconductor equipment contracts were 3.52 billion yuan, an increase of 162% over the previous year.
In 2023, the company plans to place more than 3 billion yuan in new orders for battery+module equipment, sales in the materials business exceed 5 billion yuan (1.46 billion in 2022), and overall revenue for the whole year increased by more than 60% year-on-year (according to the company's 2022 report).
4) It is expected that 2023 will be a year where the company will blossom more and new business will accelerate: expect the company's photovoltaic equipment (silicon wafer+battery+module) +consumables (crucible, diamond wire), semiconductor equipment (silicon wafer+wafers and packaging), and silicon carbide materials (6+8 inch substrate), leading to an increase in the company's orders+performance.
Pan-semiconductor “equipment+materials” leader, platform-based layout space continues to open 1) Photovoltaic equipment: The company is a leader in photovoltaic long-crystal furnaces, and has accelerated expansion into the fields of photovoltaic cell+module equipment, quartz crucibles (leading the leader), and diamond wire consumables, opening the second largest growth curve in the photovoltaic business.
2) Semiconductor equipment: large silicon chip equipment - The company has achieved full coverage of 8-inch equipment in crystal growth, slicing, polishing, CVD, etc., and equipment such as 12-inch long crystals, slicing, grinding, polishing, thinning, etc. have been sold in batches, and the products have reached the international advanced level. Power semiconductor equipment - The company's orders for monolithic 6-inch silicon carbide epitaxial equipment grew rapidly and successfully developed industry-leading 6-inch two-chip silicon carbide epitaxial equipment.
3) Silicon carbide: Technical side: The company's 8-inch N-type SiC substrates will be produced in small batches. Client: The company has formed a purchase intention with customer A (company announcement), and priority will be given to providing them with a total of no less than 230,000 silicon carbide substrates from 2022 to 2025. Production capacity side: The company plans to build an annual production capacity of 400,000 conductive and insulating silicon carbide substrates of more than 6 inches in Yinchuan, Ningxia. A research and development test line for growing, slicing, and polishing 6-8 inch silicon carbide crystals has also been built. Gradually achieve autonomous control of large-size silicon carbide crystal growth+processing technology.
4) Sapphire: The company has grown the world's leading 700kg sapphire crystal, gradually increasing the large-scale mass production grade from 300kg to 450kg. Promote the increase in production capacity of the subsidiary Ningxia Xinjingsheng and strengthen its scale advantage.
Investment advice: Optimistic about the company's future performance in the fields of photovoltaics, semiconductors, silicon carbide, and sapphires, the company's net profit for 2023-2025 is 43/56/72 billion yuan, an increase of 46%/31%/28% over the previous year, and the corresponding PE is 20/16/12 times. Maintain a “buy” rating.
Risk warning: The progress of semiconductor equipment research and development has fallen short of expectations; the expansion of downstream photovoltaic production falls short of expectations.