\u3000\u3 Guocheng Mining Co.Ltd(000688) 383 Shenzhen Xinyichang Technology Co.Ltd(688383) )
Event: the company issued a voluntary disclosure announcement on the pre increase of 2022q1 performance. It is expected to realize a net profit attributable to the parent company of 65-70 million yuan in the first quarter, with a year-on-year increase of 68.7% – 81.6%; It is expected that the net profit deducted from non parent company in the first quarter will be 64.72-69.72 million yuan, with a year-on-year increase of 70.2% – 83.3%, and the performance will continue to grow at a high speed.
The company is the leader of LED solid crystal machine and is expected to fully benefit from the rapid improvement of mini led penetration. Mini LED has been commercialized for the first year and is mainly used in backlight and direct display. The mini backlight market is mainly driven by the downstream TV and it markets. Under the demonstration effect of apple and Samsung, the penetration rate of mini LED backlight products in downstream applications continues to accelerate. It is expected that the global market scale of mini backlight is expected to exceed US $1.5 billion by 2024; The mini direct display market is mainly the display scene of Tob end with more than 110 inches. It is expected that the global market scale of mini direct display is expected to reach US $660 million in 2023. In the field of LED crystal fixing machine, the company has a global market share of 28% and a market share of more than 70% in China, ranking the first leading position in China’s LED crystal fixing machine. It is expected to fully benefit from the rapid improvement of the downstream application penetration of mini led in the future.
The running in with the subsidiary company is smooth, and the semiconductor business is expected to be large. At present, the company integrates with its subsidiary kaijiu automation smoothly in all aspects. While maintaining the sales of optical communication wire bonders and other equipment, kaijiu cooperates with the company in the overall layout and research and development of LED and semiconductor wire bonders. The company also promotes kaijiu to strengthen R & D through the support of capital, human resources, technology and other resources. At present, there are semiconductor welding line equipment in communication and verification with customers. In 2020, Chinese mainland semiconductor equipment market reached US $18 billion 700 million, but the localization rate was less than 10%. By virtue of its subsidiary kaijiu’s position in the industry of semiconductor wire bonding machine, the company’s technical advantages in the field of LED solid crystal machine can be quickly transferred to the semiconductor solid crystal machine business, and the company’s semiconductor business is expected to usher in strong growth.
We have been deeply engaged in the industry for many years and have obvious advantages in customer resources. In the field of LED, the company’s customers include Yiguang electronics, Foshan Nationstar Optoelectronics Co.Ltd(002449) , Suzhou Dongshan Precision Manufacturing Co.Ltd(002384) , Shenzhen Mtc Co.Ltd(002429) and other well-known companies. In the field of mini led, the company has entered the international well-known manufacturer Samsung and Sanan Optoelectronics Co.Ltd(600703) , BOE, Hongli Zhihui Group Co.Ltd(300219) , and other first-class manufacturers in China; In the field of semiconductor equipment, the company’s customers also include crystal conduction micro, canrui technology, Yangzhou Yangjie Electronic Technology Co.Ltd(300373) , Tongfu micro, solid technetium electronics and other well-known companies. Extensive and stable customer relationships also constitute one of the company’s solid moats.
Profit forecast and investment suggestions. We raised the company’s performance expectations. It is estimated that the net profit attributable to the parent company from 2021 to 2023 will be 230 million yuan, 350 million yuan and 540 million yuan respectively, with the corresponding growth rates of 114.7%, 52.2% and 53.3% respectively. Considering the company’s absolute leading position in the field of solid crystal machines in China, we continue to be optimistic about the accelerated volume of the company’s miniled and semiconductor business and maintain the “buy” rating.
Risk tip: the risk of macroeconomic fluctuations; The global covid-19 epidemic has repeatedly brought fluctuations in downstream demand.
