\u3000\u3 Guocheng Mining Co.Ltd(000688) 126 National Silicon Industry Group Co.Ltd(688126) )
Event: National Silicon Industry Group Co.Ltd(688126) released the annual performance express of 2021. During the reporting period, the company expects to achieve a total operating revenue of 2.467 billion yuan, a year-on-year increase of 36.19%, and a net profit of 145 million yuan, a year-on-year increase of 66.58%.
China’s silicon chip leader has achieved zero breakthrough in domestic large silicon chips. The company is one of the largest and most advanced semiconductor wafer fabrication enterprises in Chinese mainland. It achieves zero breakthroughs in SOI silicon and 300mm large silicon wafers. The company’s customers include international chip manufacturers such as TSMC, Tailian and grofangde, as well as major Chinese chip manufacturers such as Semiconductor Manufacturing International Corporation(688981) , Huahong Hongli and Huali microelectronics.
There is strong demand in the downstream market and the production capacity continues to climb. There is a strong demand for logic chips, memory chips and automotive electronics in the downstream application market, and silicon chips are in short supply. In 2022, the world’s major wafer manufacturers are expected to build a total of 17 wafer factories, and the global shortage of silicon wafer supply will continue. The capacity utilization rate of 200mm and below products (including SOI silicon wafer) of the company continues to remain high; The capacity utilization and shipment of 300mm silicon wafers have also increased significantly. As of 2021h1, the company has shipped more than 3 million 300 mm silicon wafers, and the production capacity has been climbing and increasing.
The technical level of China is leading, and the market share in subdivided fields is leading in the world. The company takes the lead in the technology level of 300mm large silicon wafer in China, realizing the full coverage of mainstream silicon wafer products and major customers in China; The technical level and market segment share of polishing wafer for MEMS with size of 200mm and below and SOI wafer with size of 200mm and below are leading in the world; The technical level and market segment share of epitaxial wafers with the size of 200mm and below are leading in China.
Other semiconductor materials such as piezoelectric thin film materials on silicon-based insulators are arranged. The R & D of the optoelectronic substrate and the production of the new piezoelectric film on the optoelectronic substrate have been carried out smoothly; At the same time, the company participated in the establishment of Guangzhou Xinrui photomask Technology Co., Ltd. in the form of participating in a special equity investment fund. The company will build an advanced photomask production line for processes of 40-28nm and above.
Investment advice
It is estimated that the company’s revenue from 2021 to 2023 will be RMB 2467 / 3705 / 4572 million respectively, with a year-on-year increase of 36.2% / 50.2% / 23.4%, and the net profit will be RMB 145 / 232 / 299 million respectively, with a year-on-year increase of 66.3% / 60.1% / 29.1%. The current closing price corresponds to 265 times of PE in 2022. Considering the strong demand of the company’s downstream market and large growth space in the future, the “buy” rating is given for the first time.
Risk tips
The R & D of new products is less than expected, and the demand of downstream market is less than expected.
