Jiangyin Jianghua Microelectronics Materials Co.Ltd(603078) (603078)
As a leading enterprise of wet electronic chemicals, the production capacity has entered a centralized release period. The company is a leading enterprise in China’s wet electronic chemicals industry, with the production and supply capacity of dozens of wet electronic chemicals. It is one of the enterprises with the most complete categories of wet electronic chemicals and the strongest supporting capacity in China. At present, the company has formed a business pattern focusing on flat panel display and semiconductor. The flat panel display field has well-known enterprise customers such as BOE. The semiconductor field has successfully entered the core supply chain of Semiconductor Manufacturing International Corporation(688981) and other enterprises. The diversified business pattern has significantly improved the company’s anti risk ability. Meanwhile, the company’s Zhenjiang and Meishan bases will release production capacity in 2022, and the company’s performance has entered an upward period.
The release of 12 inch wafer capacity and the improvement of OLED penetration drive the strong demand for wet electronic chemicals. In 2020, the scale of China’s integrated circuit market is close to trillion yuan. Under the background of accelerated localization process, the market space is broad. According to the statistical data of core idea and ittbank, by the second quarter of 2021, China’s existing crystal moon production capacity is about 6.38 million pieces, including 1.18 million pieces of 12 inch crystal moon and 1.2 million years of 8-inch crystal moon. The planned production capacity of the crystal moon is about 1.59 million pieces, including 1.32 million pieces of 12 inch crystal moon and 270000 pieces of 8-inch crystal moon. Combined with the above data, we estimate that the demand for wet electronic chemicals in China’s semiconductor industry will reach 957100 tons in 2024, more than twice the demand in 2020. Meanwhile, the consumption of OLED wet electronic chemicals in the same area is 7 times that of LCD. With the continuous expansion of OLED production capacity and the continuous improvement of its penetration rate, the demand for wet electronic chemicals in the panel industry will also grow rapidly in the future.
The layout of the three bases has gradually taken shape, and high-end production capacity has built core competitiveness. At present, the company has three production bases, namely Jiangyin headquarters, Meishan, Sichuan and Zhenjiang, Jiangsu. At present, the company has a production capacity of 208000 tons. Among them, 58000 tons of G5 wet electronic chemicals in Zhenjiang will help the company seize the 12 inch high-end wet electronic chemical market and build core competitiveness for the company.
Profit forecast: it is estimated that the company will realize operating revenue of RMB 794 million, RMB 1573 million and RMB 2064 million respectively from 2021 to 2023, and realize net profit attributable to parent company of RMB 48 million, RMB 163 million and RMB 228 million, corresponding to eps0 million 25, 0.83, 1.16 yuan. Considering the continuous strong demand for wet electronic chemicals and the superposition of G5 high technical barriers, the company is given a PE valuation of 43-47 times in 2022. The target market value range in 2022 is 7.009-7.661 billion yuan and the target stock price is 35.77-39.09 yuan, giving the company a “recommended” rating.
Risk tip: the price of raw materials fluctuates, power and production restriction intensifies, industry competition intensifies, the project is put into operation less than expected, G5 capacity verification is less than expected, and domestic substitution is less than expected.
