\u3000\u3 Guocheng Mining Co.Ltd(000688) 012 Advanced Micro-Fabrication Equipment Inc.China(688012) )
Performance announcement
Advanced Micro-Fabrication Equipment Inc.China(688012) released its 2021 annual report on March 30. In 2021, it achieved a revenue of 3.11 billion yuan, a year-on-year increase of 36.7%; The net profit attributable to the parent company was RMB 1.01 billion, with a year-on-year increase of 105.5%. We attributed it to the increase of gross profit margin at nearly five points (38% in 2020 and 43% in 2021), as well as the benefit of equity investment of non listed companies of RMB 370 million and government subsidies of RMB 350 million. In 2021, the non net profit deducted was 324 million yuan, an increase of 1291% year-on-year. The overall compound market expectation is that the profit is close to the forecast upper limit.
Brief comment
Affected by MOCVD, the gross profit margin increased rapidly: the revenue of 2021q4 was 1.04 billion, with a month on month increase of 41% and a year-on-year increase of 30%, mainly due to the significant month on month / year increase of 138% / 109% of MOCVD. In 2021, the company’s etching equipment revenue was 2 billion yuan, with a year-on-year increase of 55% and a gross profit margin of 44.4%; Due to the downstream market and the unrecognized revenue of the newly signed Mini ledmocvd equipment scale orders in 21 years, the revenue of MOCVD equipment in 2021 was 500 million yuan, an increase of about 1.5% over 2020, and the gross profit margin of MOCVD equipment reached 33%, an increase of 15 PCT year-on-year.
In 2021, the newly signed orders reached 4.1 billion yuan, with a year-on-year increase of 91%. The development of new products is smooth, and it is expected to maintain a high growth in 2022. In terms of etching equipment, 298 chamber CCP (+ 40%) and 134 chamber ICP (235%) will be delivered in 2021. It is expected to launch new applications of CCP in Damascus and extremely high aspect ratio etching in succession, covering more than 80% of the etching process. ICP is also rapidly increasing in storage and logic customers. In terms of thin film deposition equipment: new MOCVD products for miniled have achieved mass production. More than 100 orders were signed in 2021, and 52 new orders were announced in March 22. At the same time, it is expected to gradually launch new products such as LPCVD equipment and EPI equipment in 2022.
Profit forecast and investment suggestions
Due to TSMC’s substantial increase in capital expenditure, domestic substitution in full swing, and miniled driven MOCVD market recovery, we predict that the company’s revenue will be 4.6/63/8.2 billion yuan in 202224, with a year-on-year repair of 10% / 7% in 22-23 and a year-on-year increase of 47% / 38% / 31%; From 2022 to 24, the net profit attributable to the parent company was RMB 1.11/14/17 billion, with an upward revision of 7% / – 10%. Referring to the historical valuation of the company, the target price is 151 yuan according to 70 times PE in 2023, maintaining the “buy” rating.
Risk tips
The risk of slow growth of capital expenditure of key customers, the risk of backward technology, the risk of falling demand and price of MOCVD equipment, the risk of loss of core management team and key technical personnel, and the risk of lifting the ban on restricted shares.
