Konfoong Materials International Co.Ltd(300666) (300666)
China’s leading manufacturer of sputtering target, domestic substitution & product upgrading accelerated
Sputtering target industry has extremely high customer certification barriers and technical barriers, and American and Japanese companies have monopolized the global market for a long time. With the improvement of the localization of sputtering target and downstream industries, Chinese enterprises in sputtering target industry have ushered in broad development space. As the industry leader of deep cultivation of high-purity sputtering target for many years, the company has high product recognition and smooth expansion of new customers. This year, many products of the company have been verified by many new integrated circuit manufacturing plants in China, and mass production and delivery have been realized for the first time in the world-famous IDM memory chip head factory; It has successfully broken the monopoly pattern of American and Japanese multinational corporations and filled the gap in China’s electronic material industry. As downstream industries are gradually migrating to Chinese mainland, the market share of companies is expected to further improve.
Forward looking layout of semiconductor equipment parts and components, opening the second growth curve
The company cooperates with many machine manufacturers in China, relying on its strong machining ability to develop metal parts used by machines and expand product lines in new business areas. Various precision parts and components developed by the company have been widely used in semiconductor equipment such as PVD, CVD and etching machine, and mass production and delivery have been realized in many chip manufacturing enterprises and semiconductor equipment manufacturing enterprises. The company has obvious advantages in the forward-looking layout of semiconductor core parts industry, and the sales of H1 semiconductor precision parts in 2020 has exceeded the level of the whole year of last year; At the same time, due to the accelerated demand for localization and substitution of semiconductor equipment parts, the company, as the priority layout of the industry, is expected to continue to expand its product market share.
Profit forecast and valuation
It is steadily estimated that the company’s revenue from 2021 to 2023 will be RMB 1.58/2.15/2.93 billion respectively, with a year-on-year increase of 35.62% / 36.08% / 36.28%; The net profit attributable to the parent company was 149 / 242 / 372 million yuan, with a year-on-year increase of 1.40% / 61.99% / 53.78%. Corresponding to eps0 66 / 1.06/1.64 yuan. Refer to comparable companies. We valued the company at 65x in 2022, corresponding to a market value of 15.7 billion. 55x valuation in 2023. The corresponding market value is 20.5 billion yuan.
Risk statement
New product development is not as expected; Market demand is less than expected; Horizontal competition risk of parts; The expansion of the wafer factory was less than expected.
