In the second quarter of 2022, revenue was + 79.4% year-on-year, month-on-month + 4.4%, homing net profit was + 90.4% year-on-year, month-on-month-18.5%. Revenue exceeded our expectations and profits were in line with expectations. The company's revenue in the second quarter of 2022 was $621 million, up 79.4% from a year earlier, up 4.4% from a month earlier, and its net profit was $83.9 million, up 90.4% from a year earlier, down 18.5% from a month earlier. The company's revenue performance continued to be strong, exceeding our previous expectations, mainly due to the ASP improvement brought about by the upsurge in the industry and product structure adjustment; the profit side as a whole met expectations.
The epidemic situation was disturbed in the second quarter, and the exchange profit and loss of Wuxi plant affected part of the profit. 2022Q2, the company's gross profit margin is 33.6%, up 8.8pcts from a year earlier, up 6.7pcts from a month earlier, and the impact of the adjustment of government subsidy programs in the last quarter has disappeared. From the perspective of net profit, since the end of March, the epidemic situation has been disturbed in Shanghai and even across the country, which has had a certain impact on the company's production and transportation. The exchange rate change of Q2 also has an impact on the company's net profit, because the US dollar liability of Wuxi plant is larger, which is higher than its total US dollar-denominated assets, the trend of RMB depreciation has a certain negative impact on the company. We believe that this is an one-time impact and will not disturb the follow-up business.
The high growth rate of the eight-inch line continues, and ASP continues to grow. 2022Q2, the company's 8-inch line has a capacity utilization rate of 110.0%, a revenue of US $354 million, and a slight increase in ASP. We believe that strong downstream demand such as power and simulation will continue to drive the 8-inch line to maintain high capacity utilization.
Investors are worried about the downward trend of the global semiconductor cycle, but we believe that the wafer generation work as a post-cycle, especially the mature process (less production expansion), will remain high to a large extent. Throughout the year, the production line will still achieve a high gross profit margin.
The gross profit margin of the 12-inch line has increased rapidly, and the target of production expansion remains unchanged. 2022Q2, the company's 12-inch line achieved revenue of US $267 million, an increase of 1.8% over the previous month. Wuxi 12-inch factory has a capacity of 65k months in 22Q2, with the same production expansion target (still 95k at the end of the year) and a capacity utilization rate of 109.3%, continuing to maintain full capacity. The company's 12-inch quarterly gross margin was 19.6%, up from 12.0% in the previous quarter. We believe that the company's profitability is strong and has a good chance of being maintained. Looking ahead to 2022, we believe that the company's capacity release has a good pace, and the increase in ASP and the improvement in gross profit margin will lead to a significant improvement in overall profitability.
Profit forecast and investment rating: combined with downstream demand and the company's progress of production expansion, the net profit from 2022 to 2024 will be raised to $335 million (+ $38 million), $391 million (+ $41 million) and $430 million (+ $3 million), which is + 28%, + 17% and + 10% respectively compared with the same period last year, and the corresponding current price (closing price on August 11) PE is 13 times, 11 times and 10 times respectively. Corresponding to the current price (closing price on August 11) PB is 1.4,1.2x and 1.1x respectively, maintaining the "buy" rating.
Risk hint: industry demand is lower than expected risk, Wuxi plant climbing is slower than expected risk, gross profit margin improvement is weaker than expected risk, Sino-US trade friction aggravates risk