\u3000\u3000 Hangzhou Lion Electronics Co.Ltd(605358) (605358)
It is planned to acquire and expand the production capacity of large silicon wafers, further consolidate the leading position and maintain the "buy" rating
On February 7, 2022, the company announced that it plans to acquire Guojing semiconductor under Tuozhong shares. After the acquisition, the company plans to obtain 58.69% equity of Guojing semiconductor and 41.31% equity of Jiaxing Kangjing. Guojing semiconductor is mainly engaged in the research and development, production and sales of 12 inch lightly doped polished silicon wafers for integrated circuits. It is planned to build an annual production capacity of 4.8 million wafers in two phases. At present, all infrastructure construction has been completed and the line was opened on January 9, 2022. It is the first fully automatic 12 inch semiconductor silicon wafer production line in China, and is in the stage of customer introduction and product verification. If the reorganization is successful, on the one hand, it will expand the production scale of the company's existing 12 inch silicon wafer; On the other hand, Guojing semiconductor has world-class plants, equipment and technical team, and has established crystal growth laboratory, physics, chemistry and Application Laboratory, which will form complementary advantages with the company in technology; At the same time, under the background of the current high prosperity of the silicon wafer industry, the extension of the delivery date of silicon wafer related production equipment, and the production capacity of silicon wafer manufacturers in short supply, the merger and acquisition of mature production lines is conducive to the company's rapid improvement of production capacity and early blocking under the background of domestic substitution. We raised the profit forecast. From 2021 to 2023, the net profit attributable to the parent company is expected to be 615 (+ 0.66) / 916 (+ 0.55) / 1227 (+ 109) million yuan, EPS is expected to be 134 (- 0.03) / 2.00 (- 0.15) / 2.68 (- 0.11) yuan, and the current share price corresponds to 89.4/60.0/44.8 times PE, maintaining the "buy" rating.
The downstream is highly prosperous, and it is expected that silicon wafer will continue to be in short supply in 2022
According to semi data, more than 30 12 inch wafers are expected to be added globally from 2020 to 2024. As the new capacity of wafers gradually enters the release period from the middle of 2022, the demand for silicon wafers will increase significantly. According to semi data, it is estimated that the global silicon wafer shipment area will be 14 billion square inches in 2021, with a year-on-year increase of 13.9%. It is estimated that the shipment growth from 2022 to 2024 will reach 6.4%, 4.6% and 2.9% respectively. In March 2021, Xinyue chemical, the world's largest silicon wafer manufacturer, announced on its official website that the prices of all silicon products have increased by 10% ~ 20% since April 2021. Shenggao, the world's third largest silicon wafer manufacturer in the same month, said that at this stage, the order volume of silicon wafers is over capacity, and its own and clients have no inventory. On February 9, 2021, Shenggao's financial report pointed out that it is estimated that the supply of semiconductor silicon wafers will exceed the demand until 2022. We believe that the silicon wafer industry will continue to be in short supply in 2022. With the urgent demand for domestic substitution, Chinese silicon wafer manufacturers will usher in great development opportunities.
Risk tip: the downstream prosperity is less than expected, the product verification is less than expected, and the industry competition is intensified.
