Shengmei Shanghai (688082)
Shengmei Shanghai is the leader of domestic semiconductor cleaning equipment, and its downstream customers are mainly Huahong semiconductor, Changjiang storage, Hynix, etc. The company is a global layout enterprise deeply cultivating semiconductor wet equipment, with cleaning equipment accounting for 84% of revenue, and continues to expand to semiconductor electroplating equipment, advanced packaging wet equipment, vertical furnace, etc. From 2017 to 2020, the revenue / net profit attributable to parent company CAGR was 58% / 62% respectively, and the overall gross profit margin was 45%, comparable to ASML, Amat and other international giants. The company issued 43.36 million IPO shares and actually raised 3.7 billion yuan to invest in equipment R & D and manufacturing center, high-end semiconductor equipment R & D projects, and R & D and production of equipment such as overweight cleaning, electroplating, advanced packaging and furnace tubes.
Cleaning equipment industry: the technical difficulty increases, the number of cleaning steps increases rapidly, and the market space expands year by year. 1) Cleaning equipment accounts for about 5% of wafer processing equipment, and the global cleaning equipment market is expected to be about US $3 billion. 2) The number of cleaning steps accounts for more than 30% of all chip manufacturing steps. With the continuous progress of technical nodes, the demand for cleaning equipment will increase accordingly. From more than 100 steps in the 80-60nm process to more than 200 steps in the 20-5nm process. 3) In terms of competition pattern, in the global sales of cleaning equipment, diensworth in Japan accounts for 50%, Tokyo electronics in Japan accounts for 27%, RAM research in the United States accounts for 12%, and shengmei Shanghai accounts for only 3% of the market share.
The company’s differentiated technical route has been recognized by the market, and the domestic penetration rate has gradually increased. The company has developed differentiated technology to successfully solve the two problems of uneven megasonic cleaning and easy damage. The new product single-chip / trough combined cleaning equipment continues to lead the technological progress, and the coverage of cleaning types that the overall product can solve in the cleaning equipment market reaches 80%. According to the international bidding network, the proportion of the company’s cleaning equipment winning the bid in the Yangtze River storage, Huali and Huahong Wuxi production lines shows an upward trend year by year.
Based on cleaning equipment, the company has expanded to electroplating and advanced packaging equipment, and the target market scale has at least doubled. In terms of product development, it is judged that the corresponding global market space of electroplating / advanced packaging equipment / vertical furnace tube equipment of the company is USD 5 / 18-23 / 17-2 billion respectively. With the promotion of customer verification of the company’s new products, the proportion of non cleaning equipment has gradually expanded, accounting for 17% in 2021h1.
Investment advice
It is estimated that the company’s revenue from 2021 to 2023 will be RMB 1.66 billion, with a growth rate of 63% / 38% / 36%, and the net profit attributable to the parent company will be RMB 280 / 490 / 640 million, with a growth rate of 41% / 77% / 30%, corresponding to PS of 36 / 23 / 17x. Most of China’s semiconductor manufacturers of Chinese mainland only shipped to China’s wafer fabs. The company received repeated orders from Korea’s Hynix international memory giant. The differentiated technology line developed by itself was widely recognized, giving the company a certain valuation premium, covering for the first time, giving it 20 times PS in 2023, and the target price of 165.8 yuan, giving the “buy” rating.
Risk statement
The verification and expansion of downstream customers of the company is less than the expected risk; Risk of intensified market competition; Risk of dependence on some key parts suppliers.
