\u3000\u3 Guocheng Mining Co.Ltd(000688) 037 Kingsemi Co.Ltd(688037) )
On March 9, Kingsemi Co.Ltd(688037) released its 2021 annual report. The company achieved an annual operating revenue of 829 million yuan, a year-on-year increase of 151.95%; The net profit attributable to the parent company was 77 million yuan, a year-on-year increase of 58.41%; The non net profit deducted was 64 million yuan, a year-on-year increase of 395.83%.
The revenue of the two major product lines is bright, and the high growth period will continue in 2022. Thanks to the smooth introduction of the previous gluing development / single-chip wet equipment to the market, the company’s revenue increased strongly in 2021, with a year-on-year increase of 151.95% to 829 million yuan. Among them, the revenue of gluing and developing equipment was 506 million yuan, a year-on-year increase of 114.40%; The revenue of single-chip wet equipment was 290 million yuan, a year-on-year increase of 280.56%. The overall profitability of the company also improved significantly. With the market development of previous products, the gross profit margin of equipment business in the whole year was 37.40%, down 4.55pct year-on-year. However, with the rapid growth of revenue, the period expense rate decreased from 41.23% in 2020 to 30.90%, making the net profit deducted in 2021 increased by 395.83% year-on-year to 64 million yuan.
On the balance sheet side, the company’s inventory rose to 932 million yuan at the end of 2021, with a year-on-year increase of 131.73%, mainly composed of goods issued and products in process; Contract liabilities increased to RMB 353 million, with a year-on-year increase of 166.42%, which is expected to be the guarantee for the continued high growth of revenue in 2022.
The downstream capital expenditure increased sharply and the equipment boom continued. Semi predicts that global semiconductor manufacturers will build 29 high-capacity wafer factories by 2022, with a capital expenditure of more than $140 billion. TSMC, the global foundry leader, has given a capital expenditure guideline of US $40-44 billion in 2022, with a year-on-year increase of 33-46%. At the same time, it is predicted that the global foundry industry will grow by 20% in 2022. China’s foundry leader Semiconductor Manufacturing International Corporation(688981) also gave a capital expenditure guideline of US $5 billion in 2022. The upstream equipment market will benefit from the continuous growth of downstream capital expenditure.
The amount of development / cleaning of the previous gluing shall be put together, and the product line shall be widened by increasing the code. In 2021, the company’s front channel equipment made remarkable progress, and the volume of front channel development and cleaning equipment increased. In terms of gelatinization and development, the company sold 158 units in the whole year, with a year-on-year increase of 110.58%. Among them, the previous offline equipment has achieved mass sales, i-line equipment has passed the verification of some customers and entered the stage of mass production and sales, and KrF equipment has passed the ATP acceptance of customers. In terms of single-chip wet equipment, the company sold 65 sets in 2021, with a year-on-year increase of 248.28%. Among them, the previous physical cleaning equipment received batch repeated orders from many Fab manufacturers in China, such as Semiconductor Manufacturing International Corporation(688981) , Shanghai Huali, Wuhan Xinxin, Xiamen Shilan Jike, Yangzhou Yangjie Electronic Technology Co.Ltd(300373) , Qingdao Xinen, Shanghai Jita, etc. In the post channel packaging market, the company actively expanded the packaging of customers in 2021, including China, Taiwan and overseas markets. At the same time, the company also issued a fixed increase plan in 2021. It is estimated that the raised funds will not exceed 1 billion yuan to invest in Shanghai Lingang Holdings Co.Ltd(600848) and Shenyang phase II projects. In the gluing and development product line, the front ARF / arf-i equipment will be further expanded, and the single-chip wet equipment will enter the single-chip chemical cleaning market.
Investment suggestion: we estimate that the company’s revenue from 2022 to 2024 will be RMB 1.322/18.44/2.439 billion respectively, and the corresponding current price PS will be 11 / 8 / 6 times respectively. As a scarce supplier of front coating and developing equipment in China, the company is expected to continue to obtain a higher share of domestic substitution and maintain the “recommended” rating.
Risk warning: product verification is not as expected; Cyclical fluctuations in downstream industries; Market competition intensifies.
