\u3000\u3 Guocheng Mining Co.Ltd(000688) 037 Kingsemi Co.Ltd(688037) )
Core view
The leader of China’s gelatinization and development equipment is backed by Shen Institute of Chinese Academy of Sciences. The company was founded in 2002 by Shenyang Institute of automation, Chinese Academy of Sciences. Later, it was approved to undertake the project of “development and industrialization of bump package gluing and developing and single-chip wet etching equipment” in the national 02 special project. It is the only domestic gluing and developing equipment enterprise supported by the 02 major special project; Later, he undertook the 02 major special project “research and development of 300mm wafer homogenizing and developing equipment”, and successfully broke through a number of core key technologies in the previous field while expanding the field of advanced packaging. In the past, the company’s equipment was mainly used in the field of advanced packaging and small-size equipment, with a market space of US $200300 million. Breaking through the front-end equipment (track and cleaning) will expand the company’s downstream market space to more than US $8 billion. At present, the company’s front-end equipment customers have covered Semiconductor Manufacturing International Corporation(688981) , Changjiang storage and other Chinese front-line manufacturers, and the verification of new products and new customers continues to advance, The company is expected to usher in an accelerated growth stage.
Lead the domestic substitution of gluing development equipment and layout cleaning equipment to further open the growth space. In 2021, the total sales volume of semiconductor equipment exceeded 100 billion US dollars, up 40% over the same period last year, and the sales volume of semiconductor equipment in Chinese mainland has increased continuously, reaching 29%. Kingsemi Co.Ltd(688037) has the supply capacity of gluing development, cleaning, wet etching and other equipment, covering more than 10% of the demand of semiconductor front channel equipment market. At present, the company is the only manufacturer in China that can provide front gluing and developing equipment. The products of offline gluing and developing machine have been sold in batches, i-line gluing and developing machine has passed the verification of some customers and entered the stage of mass production and sales, and KrF gluing and developing machine has passed the acceptance of customers’ ATP, which is expected to continue to lead the domestic substitution in large quantities. At the same time, the company actively expands the cleaning equipment business, and the physical cleaning equipment has achieved a leading position in China. The company has occupied 9% of the cleaning equipment in China’s main front production line only through spin scrubber equipment (physical cleaning). In the future, new chemical cleaning equipment will further open up the growth space of the company.
The demand for rear / small-size equipment is strong, and the company has significant advantages. Advanced packaging drives strong demand for downstream equipment: with the trend of electronic products towards functionalization, lightness, miniaturization, low power consumption and heterogeneous integration, there is a strong demand for advanced packaging. According to yole’s statistics and prediction, the volume of advanced packaging market in 2021 will be about US $2.74 billion, and it will reach US $7.87 billion by 2027, with a compound annual growth rate of 19%. In the small-size field, the penetration of mini / micro led drives the demand for LED equipment, and new energy vehicles drive the demand for power / compound semiconductors, driving the demand for small-size equipment. The company’s rear / small size equipment has become the main application model in China. Its products are applied to the first tier factories such as Jcet Group Co.Ltd(600584) and Sanan Optoelectronics Co.Ltd(600703) , and has continued to develop China’s Taiwan and overseas markets. Now it has entered the supply chain of TSMC.
Profit forecast and investment suggestions
We predict that the company’s earnings per share in 22-24 years will be 1.58 yuan, 2.40 yuan and 3.73 yuan respectively. Due to the huge localization space of the previous gluing and developing equipment, we use the absolute valuation method (FCFF) to give a target price of 232.30 yuan and a buy rating for the first time.
Risk tips
The prosperity of semiconductor equipment industry is lower than expected; The progress of customer verification is less than expected; Risk of parts supply interruption; The improvement of profitability is less than expected; The increase of market share was less than expected.
