\u3000\u3 Guocheng Mining Co.Ltd(000688) 661 Suzhou Uigreen Micro&Nano Technologies Co.Ltd(688661) )
Investment summary
On March 30, 2022, the company released its 2021 annual report, with annual revenue of 370 million yuan, a year-on-year increase of 61.35%; The net profit attributable to the parent company was 103 million yuan, a year-on-year increase of 68.33%; The net profit deducted from non parent company was 92 million yuan, with a year-on-year increase of 52.59%.
Comments
(1) customers broke through orders and continued to increase production capacity, ensuring the rapid growth of revenue and net profit.
In the past 21 years, the company’s MEMS business achieved a revenue of 198 million yuan, with a year-on-year increase of 23.76%, of which the revenue of micro shield was 156 million yuan, with a year-on-year increase of 10.83%, and the revenue of other MEMS Micro parts was 42 million yuan, with a year-on-year increase of 119.11%, mainly due to the full sales orders of the company’s MEMS Micro parts series products and the continuous release of production capacity. At the same time, the company achieved a breakthrough in the field of optical sensor structural parts and became a qualified supplier for leading customers in the industry; The company’s semiconductor chip test probe business achieved a revenue of 156 million yuan, a year-on-year increase of 178.16%, mainly due to the company’s semiconductor test probe successfully entering the supply chain system of overseas chip design manufacturers, the new signed orders increased significantly compared with the same period of last year, and the production capacity of semiconductor chip test probe increased continuously.
(2) R & D / sales Investment doubled, the gross profit margin of semiconductor chip test probe continued to increase, and the development of overseas market was progressing smoothly.
In 21 years, the company’s R & D expenses accounted for 7.6% of its revenue, with a year-on-year increase of 1.4pct, and the sales expenses accounted for 3.1% of its revenue, with a year-on-year increase of 1.1pct. The company has always attached importance to R & D investment, carried out the improvement of existing products and the development of new products and processes, expanded high-frequency and high-speed test probes and achieved mass production in 21 years, and the gross profit margin of the company’s semiconductor chip test probe business has also significantly increased from 7.48pct to 46.39%; The company also increased its efforts to explore overseas markets, obtained opportunities for semiconductor chip test probe verification from several chip design manufacturers, and obtained some orders from several chip design manufacturers.
(3) based on the foundation of sophisticated technology, actively carry out forward-looking layout, which is expected to deeply benefit from the high-profile and generous dividends of the industry.
MEMS business: with the rapid development of the Internet of things, 5g and artificial intelligence, the demand of MEMS sensor market is growing rapidly. Yole expects the MEMS market to have + 8.3% value growth and + 11.9% unit growth from 2019 to 2024. Based on the large customer resources and strong technical production capacity in the acoustic field, the company is expected to open up growth space through horizontal expansion. Semiconductor chip test probe business: Korea leeno’s 2021 annual report disclosed that the annual revenue was about 1.5 billion yuan, with a year-on-year increase of 39.2%, including socket revenue of about 860 million yuan, with a year-on-year increase of about 56%, pin revenue of about 510 million yuan, with a year-on-year increase of 21.7%. Compared with the average revenue growth rate of only 12.6% in recent three years, it is mainly due to the strong demand in the field of semiconductor packaging and testing brought by the continuous evolution of Moore’s law, advanced packaging and other technical trends. Relying on its profound accumulation of sophisticated technology and excellent product quality, the company has grown rapidly in the field of FT testing. In the past 21 years, the company has actively released fixed increase projects to the field of CP testing and high-end substrate testing. It is expected to benefit from the existing major customer resources and the rapid opportunities of China’s semiconductor industry, and become a leading supplier of semiconductor chip testing probes in China.
Investment advice
Maintain the “buy” rating. We estimate that the net profit of the company from 2022 to 2024 will be RMB 163 million, RMB 229 million and RMB 322 million respectively, and the corresponding EPS will be RMB 203, RMB 2.86 and RMB 4.03 respectively. The current share price corresponds to the PE value from 2022 to 2024, which are 29.78, 21.17 and 15.02 times respectively. We are optimistic that the company’s traditional MEMS components will achieve stable growth from the horizontal expansion of the acoustic field, the semiconductor chip test probe will benefit from the continuous increase of the share in the FT test field and expand to the CP test and high-end substrate test field, so as to open up new growth space and achieve rapid growth.
Risk tips
MEMS industry demand, semiconductor probe business and the company’s capacity expansion were lower than expected
