\u3000\u3 Guocheng Mining Co.Ltd(000688) 200 Beijing Huafeng Test & Control Technology Co.Ltd(688200) )
Key investment points:
Beijing Huafeng Test & Control Technology Co.Ltd(688200) issue annual report. In 2021, the company realized an operating revenue of 878 million yuan, with a year-on-year increase of 120.96%; The net profit attributable to shareholders of listed companies was 439 million yuan, a year-on-year increase of 120.28%. The basic earnings per share is 7.16 yuan. The company plans to pay a cash dividend of 21.50 yuan (including tax) for every 10 shares.
The high growth of 2021 annual report exceeded expectations, benefiting from strong downstream demand and substantial increase in equipment delivery
In 2021, the company realized an operating revenue of 878 million yuan, with a year-on-year increase of 120.96%; The net profit attributable to the shareholders of the listed company was 439 million yuan, a year-on-year increase of 120.28%; Net profit deducted from non parent company was 435 million yuan, with a year-on-year increase of 193.79%.
In 2021, 1975 sets of test systems were produced, with a year-on-year increase of 146.88%; 1514 sets were delivered, a year-on-year increase of 113.54%. As of the annual report of 2021, the installed capacity of test systems developed and manufactured by the company is 4500, and the installed capacity of products ranks among the top in the world.
The non net profit margin of the company increased significantly, the profitability was significantly enhanced, and the cash flow was good
In 2021, the company’s gross profit margin was 80.22%, with a year-on-year increase of + 0.47pct; The net interest rate was 49.96%, with a year-on-year increase of -0.15pct. After deducting the net income from changes in fair value in the 2020 annual report, the non net interest rate is deducted by 49.48%, with a year-on-year increase of + 12.27pct.
In 2021, the company’s weighted roe was 18.58%, with a year-on-year increase of + 7.36pct. The profitability of the company has been greatly enhanced.
In 2021, the company’s net operating cash flow was 354 million, with a year-on-year increase of 155.6%, basically synchronized with the net profit attributable to the parent company, and the company’s operating cash flow was good.
With the superposition of capacity release and strong demand for downstream sealing and testing, the delivery capacity of the company has been greatly improved
In 2021, the company’s Tianjin production base was launched, the capacity bottleneck was completely released, and the delivery capacity increased significantly year-on-year. In 2021, the monthly delivery capacity of testing machines increased from 70 to 200. In 2021, the downstream core shortage continued, the production expansion of downstream sealing and testing enterprises accelerated, and the demand for testing machines was strong. The company increased product and customer development, the competitiveness continued to rise, and the order volume increased significantly.
In 2021, the company’s contract liabilities were 129 million, a year-on-year increase of 220.68%, and its inventory was 189 million, a year-on-year increase of 170.15%. The substantial growth of contract liabilities and inventories shows that the company has strong demand for orders, and the finished products and revenue to be recognized have increased significantly.
The launch of new products has accelerated, and the company has further expanded its market space from low-end to high-end testing machines, from analog chip testing to SOC and power semiconductor testing
The company’s main model sts8200 series is the first in China to officially put into mass production of 32 station full floating analog and mixed signal integrated circuit testing. In 2018, the company launched the sts8300 platform, which can install all test modules in the test head. The platform has the parallel test capability of more than 64 stations and can test analog and mixed signal integrated circuits with higher number of pins and more stations. The sts8300 platform has accelerated its penetration in recent years, with higher product unit price, which has been recognized by customers. By the mid-term report of 2021, more than 100 units have been installed in the world. With the inclination of the company, the volume will be accelerated in 2022, driving the increase of the average unit price of the company’s products.
After the IPO project of the company is completed, it is expected to produce 200 SOC testers per year. At present, the company is carrying out or will carry out a number of technical research and development of SOC integrated circuit automatic test systems, and some products have been mass produced and installed.
The company provides customers with PIM special test solutions based on sts8200 test platform for high-power IGBT / SiC Power module and KGD test. With the continuous exceeding expectations of photovoltaic and new energy vehicles, and the high growth trend of new application markets represented by the Internet of things, big data, artificial intelligence, 5g communication and automotive electronics, the testing demand of power devices represented by IGBT, Gan and SiC has increased significantly. The company has a large market space for entering the power semiconductor testing machine. According to semi data, the overall market scale of global semiconductor test equipment in 2018 was about US $5.633 billion, of which the market scale of SOC and digital integrated circuit test equipment was about US $2.549 billion. According to CCID Consulting data, in 2018, the market scale of analog integrated circuit test system in China (mainland) was 431 million yuan, and the market scale of SOC integrated circuit test system was 845 million yuan. The market space of SOC tester is more than twice that of analog tester, and the market space is broader.
Profit forecast and valuation
Under the influence of the epidemic and trade war, the global core shortage has not been alleviated. The downstream sealing and testing enterprises continue to expand production, and the demand for equipment is strong. The new products of the company’s simulation testing machines have entered the mass production stage, helping the company’s performance growth in the next year and the next. In the medium and long term, the company has entered the field of SOC and power semiconductor testing machines with greater market space from analog testing machines, and actively explored more customers to open up market space in the future. We predict that the operating revenue of the company from 2022 to 2024 will be 1.317 billion, 1.791 billion and 2.355 billion respectively, the net profit attributable to the parent company will be 657 million, 895 million and 1.178 billion respectively, and the corresponding PE will be 37.33x, 27.43x and 20.84x respectively. It will be covered for the first time and rated as “overweight”.
Risk tips: 1: the prosperity of the semiconductor industry is declining, and the downstream capital expenditure is weakening; 2: The company’s new product expansion is less than expected; 3: The rising price of raw materials and the continued shortage of chips affect the company’s product delivery and gross profit margin.
