\u3000\u3000 Tianjin Zhonghuan Semiconductor Co.Ltd(002129) (002129)
Key points
Event: the company released the performance forecast for 2021. It is expected to realize an operating revenue of 40 ~ 42 billion yuan in 2021, with a year-on-year increase of 109.9 ~ 120.4%; The net profit attributable to the parent company was 3.8 ~ 4.2 billion yuan, with a year-on-year increase of 249.0 ~ 285.7%, exceeding market expectations and in line with our expectations. According to the performance forecast, the company is expected to realize a net profit attributable to the parent company of RMB 1.038 ~ 1.438 billion in 2021q4, with a year-on-year increase of 327% ~ 492% and a month on month change of – 19% ~ + 12%.
The production and sales of 210 silicon wafers maintained a high growth, and the product structure continued to upgrade. It is estimated that the company’s silicon wafer shipments in 2021 will exceed 50gw, of which 210 silicon wafers account for more than 50%; It is estimated that the company’s total silicon wafer production capacity will reach 88gw by the end of 2021, of which 210 products account for 74%; After the fixed increase is implemented, the company’s total silicon wafer production capacity is expected to increase to 150gw in 2024, of which 210 products account for 85 ~ 90%.
Under the background of high silicon material price, the excessive raw material price and the game between supply and demand have affected the manufacturing cost advantage brought by the company’s 210 products to a certain extent. However, with the decrease of silicon material consumption rate and the increase of silicon wafer a product rate brought by technological progress, and the superposition of good supply chain system management, the company has greatly improved the gross profit per unit product.
The scale of semiconductor production and marketing has increased rapidly, the layout reserve and the global business expansion. In 2021, the company’s semiconductor production capacity increased steadily. In the first three quarters of 2021, the sales volume of semiconductor materials exceeded 260 million square inches, and the production and sales scale increased by 90% year-on-year; By the end of 2021, the monthly production capacity will be 8-inch 700000 pieces and 12-inch 170000 pieces. In addition, taking advantage of the rapid growth opportunity of the semiconductor market, the company has signed long-term strategic cooperation agreements with a number of international chip manufacturers while growing together with strategic customers, laying a customer foundation for global business expansion.
Industry 4.0 continues to help improve the company’s efficiency and product quality. With the continuous trend of reducing the cost of industrial technology, the company accelerated the application and upgrading of industry 4.0 in the whole process of production. The per capita labor productivity continued to be greatly improved, the product quality and consistency continued to be improved, the consumption of raw materials and auxiliary materials effectively improved, the factory operating cost continued to decline, and effectively promoted the improvement of the production and marketing scale and product quality of 210 products.
Maintain the “buy” rating: according to the company’s photovoltaic silicon wafer shipping price and semiconductor silicon wafer field expansion plan, we maintain the 21-year profit forecast and raise the 22 / 23 year profit forecast. It is expected that the company’s net profit attributable to the parent company will be 4.128/58.53/7.203 billion yuan in 21-23 years (maintain / increase 12% / increase 11%), and the corresponding EPS will be 1.28/1.81/2.23 yuan respectively. The current stock price corresponds to 24 times of 22-year PE. The technological innovation product G12 silicon wafer launched by the company is ahead of the industry, which helps the company improve the profitability of photovoltaic silicon wafer; At the same time, after a further breakthrough in the scientific and technological attribute of semiconductor silicon wafer, the company’s valuation is expected to continue to improve under the triple factors of policy dividend, domestic substitution and prosperity improvement of the semiconductor industry; After the addition of TCL, a new chapter of hybrid reform was officially opened. Industry 4.0 will continue to help improve the company’s efficiency and product quality, and maintain the “buy” rating.
Risk tip: 210 silicon wafer shipment and profit are lower than expected; The production capacity and sales of semiconductor silicon wafers were lower than expected.
