Zhejiang Jingsheng Mechanical & Electrical Co.Ltd(300316) (300316)
The world’s largest sapphire base with an annual output of 3500 tons is put into operation, and the sapphire business is expected to be large-scale; Silicon carbide project contract Yinchuan
1) according to the official WeChat official account, the first crystal of the 3500 tons sapphire project in December 3rd was successfully launched on the industrial sapphire crystal manufacturing and processing project (phase I), marking the world’s largest industrial sapphire production base. In the first half of 2021, the revenue of crystal Sheng sapphire material was 164 million yuan, up 145% from the same period last year, and the gross profit margin was 20.9%.
2) Xinjingsheng was founded in October 2020 with a total investment of 500 million yuan from Jingsheng and Lens Technology Co.Ltd(300433) (the company accounts for 51% of the shares and Lens Technology Co.Ltd(300433) accounts for 49%). Jingsheng has mastered 700kg sapphire growth technology, has strong cost competitiveness and scale advantages, and cooperates with Lens Technology Co.Ltd(300433) . The consumer electronics industry has great potential. If the expansion of sapphire business is successful, it is expected to accelerate the volume.
3) On December 3, the company’s annual output of 400000 silicon carbide semiconductor materials project has been successfully signed in Yinchuan, looking forward to further business breakthrough.
It is planned to increase silicon carbide materials and semiconductor equipment by 5.7 billion to become the leader of semiconductor equipment + materials; Nearly 20 billion orders in hand
1) Silicon carbide substrate wafer production base project: it is planned to build an annual production capacity of 400000 conductive + insulating silicon carbide substrates with an annual output of more than 6 inches in Yinchuan, Ningxia. The company is setting up a pilot production line from raw material synthesis > crystal growth > cutting, grinding and polishing. It has successfully grown 6-inch conductive silicon carbide crystals, whose main properties meet the requirements of industrial grade wafers in the industry, and is being tested by the third party and verified by downstream epitaxy. The global 10 billion market of silicon carbide substrate is mainly occupied by wolfspeed, II-VI, Rohm and other companies, and there is a wide space for domestic substitution.
2) Semiconductor large silicon wafer equipment test line project: it is planned to build a 12 inch semiconductor large silicon wafer equipment pilot line. It will help to test and verify semiconductor equipment and processes for customers, build a good customer relationship, and strengthen the first mover advantage of supporting the company’s industrial chain.
3) Production and manufacturing project with an annual output of 80 sets of semiconductor material polishing and thinning equipment: it is planned to build an annual output of 35 sets of semiconductor material thinning equipment and 45 sets of semiconductor material polishing equipment in Shaoxing, Zhejiang, so as to further improve the company’s industrialization supporting capacity in the field of semiconductor wafer equipment. At present, Zhonghuan leading, National Silicon Industry Group Co.Ltd(688126) , Hangzhou Lion Electronics Co.Ltd(605358) , yisiwei, Thinkon Semiconductor Jinzhou Corp(688233) etc. are all expanding production capacity in 8-inch or 12 inch silicon wafer projects, driving the expansion of demand for thinning and polishing equipment, and there is a wide space for domestic substitution.
4) Orders in hand: at the end of the third quarter, the company’s contract liabilities reached 3.8 billion yuan, a year-on-year increase of 72%. As of Q3 in 2021, the company’s orders on hand were 17.76 billion yuan (a year-on-year increase of 201%, which is expected to be mainly photovoltaic equipment orders), including 726 million yuan of semiconductor equipment orders (a year-on-year increase of 77%). From October to November, the company signed another 2.32 billion orders with Gaojing and Shuangliang, and the orders on hand are expected to be nearly 20 billion. The company occupies an absolute leading position in the non Longji market, and its performance is expected to grow rapidly in the future.
Investment suggestion: we are optimistic about the company’s performance in the fields of photovoltaic, semiconductor, sapphire and silicon carbide in the next five years. It is expected that the company’s net profit attributable to the parent company will be RMB 1.52/20.9/27 billion from 2021 to 2023, with a year-on-year increase of 77% / 37% / 29%, corresponding to 58 / 42 / 33 times of PE. Maintain the “buy” rating.
Risk tip: the R & D Progress of semiconductor equipment is lower than expected; The downstream expansion of photovoltaic production was less than expected.
