Shanghai Wanye Enterprises Co.Ltd(600641) (600641)
Event description
The company announced that the holding subsidiary Jiaxin semiconductor signed a project investment agreement with the people’s Government of Xitang Town, Jiashan County, and plans to invest 2 billion yuan to build a new semiconductor equipment project with an annual output of 2450 sets / set and a semiconductor refurbishment equipment project with 50 sets / set, of which Shanghai Wanye Enterprises Co.Ltd(600641) investment will not exceed 800 million yuan.
Core view
Focus on semiconductor front channel equipment, and Jiaxin semiconductor helps build “Wanxin group”. According to the announcement, Yangtze River Delta integration demonstration zone (Zhejiang Jiashan) Jiaxin Semiconductor Equipment Technology Co., Ltd. will mainly focus on the development, production and equipment renovation of 8-inch and 12 inch semiconductor new equipment such as etching machine, rapid heat treatment, film deposition, single-chip cleaning machine, trough cleaning machine, tail gas treatment and manipulator. We believe that the company already has the strongest ion implantation equipment platform in China, kestone and semiconductor In addition to compartsystems, the core supplier of equipment parts, it has begun to accelerate its penetration into other equipment fields, realize the transformation and development of the company from 1 to N through investment, R & D and second-hand equipment renovation, and the building of semiconductor equipment and material platform is taking shape.
Hand in hand with Ningbo Xinen semiconductor, multi-directional layout of the equipment core track. According to the announcement, the second largest shareholder of Jiaxin semiconductor is Ningbo Xinen, with a shareholding ratio of 20%. An important shareholder of Ningbo Xinen is Semiconductor Manufacturing International Corporation(688981) founder Dr. Zhang Rujing, who has decades of R & D experience in semiconductor integrated circuit manufacturing technology, equipment and materials. We believe that the cooperation between the company and Ningbo Xinen will greatly enhance the possibility of the company to achieve technological breakthroughs in other core front-end equipment fields in the future, and is expected to further open up the industrial chain and realize closed-loop through strong cooperation, so as to continuously create higher and larger income and profit scale for the company.
The endorsement and blessing of the two funds laid a solid foundation for transformation. According to the announcement, Jiaxin semiconductor will follow-up financing based on its own development in the future, and always ensure that Wanye’s holding position remains unchanged. Meanwhile, Wanye will make every effort to promote the construction and development of Jiaxin semiconductor project through socialized financing and local government industrial fund financing. In 2018, Wanye won the first phase of national large fund (currently accounting for 6.07%), which is the best endorsement for the road of transformation; as an important partner of Shanghai semiconductor equipment and materials industry investment fund, Wanye is expected to enjoy the synergy brought by industrial chain investment.
Profit forecast
Maintain the “buy” rating. We estimate that the net profit of the company from 2021 to 2023 will be RMB 418 million, RMB 512 million and RMB 661 million respectively, and the corresponding EPS will be RMB 0.44, RMB 0.53 and RMB 0.69 respectively. The current share price corresponds to PE values of 76.46, 62.51 and 48.43 times from 2021 to 2023 respectively. We are optimistic that the company will achieve a breakthrough in domestic substitution of integrated circuit ion implanters through kaishitong, and realize the rapid growth of orders after passing the verification in the wafer factory; At the same time, it relies on the investment in compartsystems to realize the investment income; In the future, it is still expected to make further investment through sufficient cash on hand, so as to bring revenue or profit increment.
Risk statement
The company’s business performance, ion implanter orders and industry growth were lower than expected.
