\u3000\u3 Guocheng Mining Co.Ltd(000688) 012 Advanced Micro-Fabrication Equipment Inc.China(688012) )
Key investment points
Event overview:
The company released its 2021 annual report: the revenue was 3.1 billion yuan, a year-on-year increase of + 37%, the net profit attributable to the parent was 1.011 billion yuan, a year-on-year increase of + 105%, and the net profit not attributable to the parent was 324 million yuan, a year-on-year increase of + 1291%. The three indicators basically met the previous performance express guidelines. It is estimated that the company achieved a revenue of 1.035 billion yuan in 21q4, with a month on month ratio of + 41% and a year-on-year ratio of + 30%. The net profit attributable to the parent company in this quarter was 470 million yuan, with a month on month ratio of + 224% and a year-on-year ratio of + 118%. The corresponding deduction of non attributable net profit was 159 million yuan, with a month on month ratio of + 54% and a year-on-year ratio of + 132%.
The revenue of etching equipment increased significantly, and the gross profit margin of MOCVD increased significantly
The rapid growth of the company’s revenue and net profit is mainly due to the strong growth of etching equipment in 21 years: the equipment generated revenue of 2 billion yuan, with a year-on-year increase of 55% and a gross profit margin of 44.32%. Due to the unconfirmed revenue of large-scale orders, MOCVD achieved a revenue of 500 million yuan in the whole year, with a year-on-year increase of 1.53%, but the gross profit margin increased significantly from 18.65% in 20 years to 33.77% in 21 years. Behind this is the large-scale production of the company’s MOCVD equipment on the production line of industry-leading customers, and the scale effect is obvious. In terms of profits, the company’s equity incentive expenses in 20 and 21 years are 124 million and 215 million yuan respectively. If the equity incentive expenses are added back, the profit after deducting other non recurring profits and losses in 21 years is 539 million yuan, an increase of 267% compared with 147 million yuan in 20 years. Looking forward to 2022, the company’s contract liabilities by the end of the year 21 were 1.37 billion yuan, an increase of nearly 470 million yuan compared with 900 million yuan at the end of the quarter of 21q3, and the newly signed orders in the year 21 were 4.13 billion yuan – higher than the revenue in the year 21, showing abundant growth momentum in 2022.
The market share of CCP etching continues to increase, and ICP etching tends to mature
1) CCP: in 21 years, the CCP etching equipment was delivered to 298 cavities, with a year-on-year increase of 40%. The products were used in the IC production lines of front-line customers outside China, and the market share of some customers has entered the top three. In terms of advanced logic, the company has successfully obtained repeated orders for production lines of 5nm and below. In terms of storage circuits, the company’s equipment has been widely used in 64 layer and 128 layer 3D NAND production lines. This product is expected to achieve steady growth with the capacity climb of 3D NAND factory. In addition, in view of the high boom of mature technology, the company launched the first 8-inch CCP etching in 21m6, which is expected to fully grasp the demand boom in power semiconductors and other fields. 2) ICP: the company’s ICP equipment has been verified on more than 100 ICP etching processes of more than 15 customer production lines, and mass production has been realized in some processes. The company has successfully delivered 180 reaction chambers on ICP equipment and 134 chambers in 21 years, with a year-on-year increase of 235%.
MOCVD is expected to fully grasp the high boom of miniled and third-generation semiconductor
1) blue light lighting and led epitaxy: the company’s blue light lighting prism A7 and deep UV LED epitaxial prism hit3 products continue to serve customers. 2) Miniled: 21m6. The company released the MOCVD device prismonimax for mass production of miniled. The product is designed for high production. In that year, it has received more than 100 orders. In addition, the company is also developing MOCVD devices for microled applications, which is expected to further grasp the high growth of this potential field of mini / microled. 3) Third generation semiconductor: MOCVD equipment for GaN power devices developed by the company has been delivered to leading customers at home and abroad for verification, and the research and development of silicon carbide epitaxial equipment has been started at the same time. At present, the third generation semiconductor material manufacturers expand their production on a large scale, which is expected to strongly stimulate the demand for the company’s relevant MOCVD equipment.
Fund raising projects and new equipment layout open up space for long-term development
In the 21st year, the company completed a fixed increase project of 8.2 billion yuan for three major projects. Among them, the port base is mainly responsible for the improvement and upgrading of existing products. By the end of 21, the project progress is 14%. Nanchang base is mainly responsible for the large-scale mass production of more mature products. The project progress of the base by the end of 21 is 2%. The headquarters and R & D center are responsible for the R & D of higher-end ICP, CCP and MOCVD equipment, as well as the development of HPCVD, conductor film LPCVD, ALD, EPI and other equipment. In addition, the company completed the capital increase of 100 million yuan for Ruili instrument in 21q1, enabling the company to enter the field of testing equipment. On the whole, the company is expected to broaden its product range and open up long-term development space through raising investment and external equity.
Investment advice
We adjusted the forecast of the company’s net profit attributable to the parent company in 2022 / 22 / 24 to RMB 1.18/15.4/1.94 billion (previously, the net profit attributable to the parent company in 202223 was expected to be RMB 8.5/1.05 billion, and the large change was mainly due to the fact that the major item in the company’s non recurring profit and loss was the equity of other companies, and its fair value change was difficult to predict, resulting in large fluctuations in the forecast of the net profit attributable to the parent company). The corresponding PE was 61 / 47 / 37 times, referring to the current 97 times PE (TTM) of Shenwan semiconductor, Considering that the company is one of the leading enterprises in etching and MOCVD equipment in China and its technical strength is leading in China, it maintains the “buy” rating.
Risk tips
The industry boom is less than expected, the R & D progress is less than expected, and the product verification at the customer is less than expected.
