\u3000\u3 Guocheng Mining Co.Ltd(000688) 233 Thinkon Semiconductor Jinzhou Corp(688233) )
The report mainly focuses on the three main business directions of the company, and analyzes the relationship between various businesses in the industrial chain, the business models of different products, the position of the company, its own characteristics and advantages and the possibility of future development. The main purpose of the report is to eliminate the concerns of the market about the cyclical impact of the company on large-diameter monocrystalline silicon materials, Emphasize the importance of replacing silicon electrode products made in China by Chinese wafer factories, and reiterate the important strategic significance of light doped low defect large silicon wafers in the future development of the company.
Core view
The production capacity is the first, the technology is leading, and the growth of large-diameter silicon material is greater than that of periodicity. Shengong is the leader of large-diameter monocrystalline silicon materials in the world, with a global share of about 15%. In the past, the growth relied on the demand growth of downstream silicon electrodes, which has a certain periodicity. As the core team of the company has excellent genes of silicon wafer materials, the technology, quality and production capacity of upstream materials have been significantly improved in the past few years. Benefiting from the high requirements and high dependence of customers on upstream materials, the trend of superimposed industrial division and transfer has accelerated, and the share of the company has increased significantly in recent years. With the acceleration of the large diameter of silicon electrode, the downstream will focus more on the post processing with higher value, and the material suppliers will enter a period of rapid growth. The increase of future share and the optimization of large-diameter product structure are expected to promote the rapid growth of material business for a long time, and the growth is significantly greater than the periodicity.
China’s wafer factories have accelerated their expansion, and domestic etchers have helped silicon electrodes to achieve import substitution. Silicon electrode is difficult to process and has high added value. On the basis of maintaining the original material business, the company quickly broke through the post-processing technology and successfully entered the downstream silicon electrode, opening up growth space in the Chinese market. The rapid expansion of China’s wafer fab and etching equipment has created an excellent replacement opportunity for local suppliers. As the current supplier of head electrodes, China is facing the incremental market space in Chinese mainland, and is expected to seize market share quickly by virtue of integration advantages and location advantages, and establish and consolidate its leading position in China’s silicon electrode market. Change the global silicon electrode market pattern.
The mismatch between supply and demand drives the volume and price of semiconductor silicon wafers to rise simultaneously, and the large silicon wafers with light doping and low defects are thick and thin. Domestic silicon wafer manufacturers have a high maturity in the field of heavily doped silicon wafers, and the development of lightly doped silicon wafers lags behind Thinkon Semiconductor Jinzhou Corp(688233) core team has more than 20 years of production experience in light doped low defect silicon wafers, and has accumulated rich production experience in light doped crystal growth by virtue of large-diameter monocrystalline silicon material business, which has laid a solid foundation for turning to light doped silicon wafer production. The company raised and invested 8-inch light mixed low defect polishing wafer project is progressing smoothly, and the products have entered the customer certification process. The mismatch between supply and demand in the industry promotes the simultaneous rise of silicon wafer volume and price. The company’s strategic layout is expected to help it become a high-quality supplier of domestic lightly doped and low defect silicon wafers.
Profit forecast
“Buy” rating is given for the first time. We estimate that the net profit of the company from 2021 to 2023 will be 220 million yuan, 308 million yuan and 404 million yuan respectively, and the corresponding EPS will be 138 million yuan, 192 million yuan and 253 million yuan respectively. The current share price corresponds to PE values of 60.94, 43.62 and 33.23 times from 2021 to 2023 respectively. We are optimistic that the company’s traditional monocrystalline silicon materials will continue to increase their share due to large diameter. Based on the technical advantages of the material end and the rapid layout of downstream localization, silicon electrodes will bring incremental contributions. After breaking through the downstream verification through technical reserves, we will speed up the domestic substitution of silicon wafers, so as to achieve faster and higher growth in revenue and profit end.
Risk tips
The company’s performance, semiconductor industry, product export and promotion of raised investment projects were lower than expected.
