\u3000\u30 Guangdong Tengen Industrial Group Co.Ltd(003003) 16 Zhejiang Jingsheng Mechanical & Electrical Co.Ltd(300316) )
Event: the company issued a notice of fixed scale adjustment recently. The board of directors of the company is going to adjust the plan of issuing the stock to the specific object. The silicon carbide substrate production base project will be transferred from this investment project to the subsequent use of its own funds and other financing methods. The amount of the proposed fund-raising will be reduced to no more than 1 billion 420 million yuan (inclusive) from less than 5 billion 700 million yuan (inclusive).
Benefiting from the expansion of downstream silicon wafer manufacturers, orders on hand supported the high growth of the company’s performance: according to the company’s third quarterly report of 2021, as of Q3 of 2021, the company had not completed contracts for crystal growth equipment and intelligent processing equipment totaling 17.76 billion yuan (including tax). In 2021, Q4 signed 1.485 billion and 1.615 billion contracts with Gaojing and Shuangliang silicon materials respectively, with more than 20 billion orders on hand. According to the performance express in 2021, the revenue in 2021 was 5.961 billion yuan, a year-on-year increase of + 56.44%, and the net profit attributable to the parent company was 1.718 billion yuan, a year-on-year increase of + 100.23%. The downstream silicon wafer manufacturers actively promoted the production expansion progress, and the company’s performance exceeded expectations.
In the field of semiconductor equipment, accelerate the domestic substitution process: the amount of raised investment after adjustment does not exceed 1.42 billion yuan, of which 564 million is invested in the 12 inch integrated circuit large silicon wafer equipment test line project, and 432 million is invested in the production and manufacturing project of 80 sets of semiconductor material polishing and thinning equipment per year. Chinese sealing and testing manufacturers have actively expanded their production. Three Chinese head sealing and testing plants Jcet Group Co.Ltd(600584) , Tongfu Microelectronics Co.Ltd(002156) and Tianshui Huatian Technology Co.Ltd(002185) have raised capital expenditure, and there is a strong demand for polishing and thinning equipment. After the release of production capacity, semiconductor equipment will thicken the company’s performance.
Silicon carbide has broad application prospects, opening the company’s second growth curve: the company will “silicon carbide substrate wafer production base project” from the investment projects, and will not affect the overall layout and development of silicon carbide in the future. At present, the company’s main technical indicators of silicon carbide have reached or better than the technical level in the industry. According to the company’s announcement, the company has obtained the intention order of silicon carbide. From 2022 to 2025, the company will give priority to providing customer a with a total of no less than 230000 silicon carbide substrates. The expected amount of the intention contract is 1.3-1.4 billion yuan. After the completion of the silicon carbide project, it is estimated that the annual revenue will increase by 2.356 billion yuan, opening the second growth curve of the company.
Profit forecast: as the leader of China’s long crystal equipment, the company has full orders on hand and will continue to benefit from the expansion of silicon wafer manufacturers in the future; The layout of semiconductor equipment and silicon carbide substrate materials will open a new growth curve. It is estimated that the net profit attributable to the parent company from 2021 to 2023 will be 1.72 billion, 2.53 billion and 3.41 billion respectively, and the corresponding PE will be 46, 32 and 23 times respectively, giving a “buy” rating.
Risk tip: the expansion of downstream silicon wafer manufacturers is less than expected; The new project is not progressing as expected
