\u3000\u3 China Vanke Co.Ltd(000002) 129 Tianjin Zhonghuan Semiconductor Co.Ltd(002129) )
Event: the company released the annual performance express in 2021, and achieved an operating revenue of 41.025 billion yuan in 2021, with a year-on-year increase of 115.28%; The net profit attributable to the parent company was 4.020 billion yuan, a year-on-year increase of 269.14%; The net profit attributable to the owners of the parent company after deducting non recurring profits and losses was RMB 3.859 billion, a year-on-year increase of 305.10%.
Optimization and upgrading of product structure and continuous improvement of profitability: the company’s revenue and net profit attributable to the parent company in 2021 have more than doubled year-on-year, mainly due to the accelerated improvement of the company’s production capacity and the optimization and upgrading of product structure. Through technological innovation and process optimization, the company’s single furnace production efficiency is leading in the industry, and the silicon material consumption rate per unit product has decreased significantly year-on-year. Through the improvement of thin line and flake process, the silicon wafer yield and product a rate have increased significantly. From the perspective of Q4 single quarter, the operating revenue of Q4 single quarter was 11.936 billion yuan, with a year-on-year increase of 110.14% and a month on month increase of 4.29%; The net profit attributable to shareholders of listed companies was 1.259 billion yuan, a year-on-year increase of 418.11% and a month on month decrease of 1.79%; The net interest rate was 10.54%, with a year-on-year increase of 4.45pct and a month on month decrease of 1.00pct. Q4 performance continued the high growth trend, with a year-on-year increase in revenue and net profit attributable to the parent company, and a continuous increase in net interest rate.
The semiconductor silicon wafer business has increased significantly and the production capacity has been accelerated: at present, the company can benchmark international advanced manufacturers in 8-inch product technology and mass production quality control capacity, and the products of 8-inch and below have basically achieved full coverage of Chinese customers; The 12 inch products are in the period of increment and breakthrough. The mass production speed of CIS and characteristic logic (DDIC, PMIC) has been accelerated, and the product dimension has been upgraded. It has become the baseline of many customers, and the sales proportion of main customers has gradually increased. In terms of production capacity, according to the company’s announcement, as of the end of the third quarter of 2021, the monthly production capacity has been 650000 pieces of 8 inches and 100000 pieces of 12 inches, and the new layout of small-diameter expansion and 8-inch new product projects have been formed. The company expects to achieve the set goal of monthly production capacity of 750000 pieces of 8 inches and 170000 pieces of 12 inches by the end of 2021. With the smooth progress of new investment projects in Tianjin and Yixing, Jiangsu, the company’s production capacity will be further effectively released, which is expected to continue to benefit from the high prosperity of the industry and the trend of domestic substitution.
The gradual release of new production capacity of wafer factories is expected to drive the growth of upstream silicon wafer demand: driven by the high boom of semiconductor market, wafer factories have significantly expanded production and increased capital expenditure. TSMC said at the latest performance briefing that the capital expenditure is expected to be between us $40 billion and us $44 billion in 2022, with a year-on-year increase of 33% to 47%. As the new capacity of the wafer factory gradually enters the release period, it is expected to drive the demand for upstream silicon wafers to increase significantly. Recently, Xinyue chemical, taishengke and sumco, the leading manufacturers in the semiconductor silicon wafer industry, said at the performance briefing one after another that the supply of large-size semiconductor silicon wafers is expected to exceed the demand as soon as the second half of next year and 2023 at the latest. According to semi, the global silicon wafer shipment is expected to increase by 13.9% to 14 billion square inches in 2021, and the shipment is expected to increase by 6.4% / 4.6% / 2.9% to 148.96/155.81/16.033 billion square inches in 2022 / 2023 / 2024. The demand of semiconductor silicon wafer market is expected to continue to grow.
Investment suggestion: we estimate that the company’s revenue from 2021 to 2023 will be 41.025 billion yuan, 55.754 billion yuan and 70.346 billion yuan respectively, and the net profit attributable to the parent company will be 4.017 billion yuan, 5.114 billion yuan and 6.819 billion yuan respectively, maintaining the “Buy-A” investment rating.
Risk warning: downstream demand attenuation risk, market competition risk, raw material price rise risk, and the risk that the production capacity is not up to expectations.
