\u3000\u3000 Hangzhou Lion Electronics Co.Ltd(605358) (605358)
Core view
Event: jinruihong Microelectronics (Quzhou), the holding subsidiary of the company, plans to acquire 58.69% equity of Guojing semiconductor.
It is proposed to take a stake in Guojing semiconductor and improve the product layout of light doped silicon wafers: Guojing semiconductor was established in December 2018. Its main business is 12 inch light doped semiconductor silicon wafers, which are widely used in DRAM, nandflash memory chip, medium and low-end processor chip, image processor, digital TV top box, mobile phone baseband, WiFi, GPS, Bluetooth, NFC, ZigBee, norflash chip MCU, etc. According to public data, the total investment of guojingda silicon wafer project is planned to be 11 billion yuan, with a planned annual production capacity of 4.8 million 12 inch silicon wafers, including 1.8 million in phase I, 1.8 million in phase II and 1.2 million in phase III. At present, Guojing has completed all infrastructure construction, and the 12 inch silicon wafer automatic production line for integrated circuit production has been put into operation, which is in the stage of customer introduction and product verification. Hangzhou Lion Electronics Co.Ltd(605358) at present, the production capacity and technology of 12 inch silicon wafer are mainly heavily doped, which is mainly used in power semiconductor, analog chip and other fields. Taking a stake in Guojing semiconductor will help the company strengthen the strength of light doped products.
The Guojing team has a profound technical background and strong cooperation to boost the market share: the Guojing process team is a single crystal growth expert of Czarist method at Lapland University of technology in Finland and a doctor of materials science from Oxford University. It is fully responsible for the company's crystal process growth theory and process development. It is engaged in the research and development of single crystal silicon growth process He has nearly 20 years of rich experience in the research and development of single crystal wafer production process. In addition, Tang Yuming, the factory manager of Germany's Siltronic (Singapore), as the project leader, led more than 30 former German Shichuang technicians (the technical strength of German Shichuang silicon wafer is strong, and one of the purposes of universal wafer's acquisition of German Shichuang is to obtain its key technology patents). On average, the team has more than 10 to 20 years of experience in the production of 12 inch semiconductor silicon wafers, and has long-term precipitation core technology, core personnel and manufacturing backbone, covering all process sections, so as to fully ensure the unity and integrity of the process route. At the same time, Guojing has independent intellectual property rights of crystal growth process, maintenance and analysis process, corrosion process and other production processes. Taking a stake in Guojing is expected to strengthen the technical strength in the field of Hangzhou Lion Electronics Co.Ltd(605358) silicon wafers and accelerate the increase of market share.
Profit forecast and investment suggestions
Considering that the agreement signed this time is only a framework and there is uncertainty in the progress of investment, we maintain the prediction that the earnings per share of the company will be 1.30, 1.97 and 2.80 yuan in 21-23 years. Considering that the localization rate of large-size silicon wafers is still at a low level and the company has broad growth space in the future, we choose the absolute valuation method (FCFF) to maintain the target price of 161.03 yuan and the buy rating of the company.
Risk tips
The prosperity of silicon wafer industry is lower than expected; The downstream demand of power devices is less than expected; The localization progress is less than expected; The business expansion of compound semiconductor is less than expected; Production capacity deployment and construction were not as expected.
