Tianyue advanced (688234)
The revenue grew steadily and the net profit turned from loss to profit. In 2021, the company realized a revenue of 494 million yuan, a year-on-year increase of + 16.25%; The net profit attributable to the parent company was 90 million yuan, and the loss was reversed for the first time. In 2021, the company sold 57200 silicon carbide substrates, a year-on-year increase of + 47.19%. In terms of profitability, the company’s gross profit margin in 2021 was 28.43%, with a year-on-year increase of – 6.85%; The net interest rate is 18.21%. According to yole report, in 2021, the market share of the company in the field of semi insulated silicon carbide substrate remained the top three in the world for three consecutive years.
Technology R & D continues to improve, superposition scale effect, and the unit cost of silicon carbide substrate continues to decrease. In 2021, the company’s average unit cost of silicon carbide substrate was about 4545 yuan / piece, a year-on-year increase of – 22.25%. The unit labor cost per piece and the unit material cost per piece were -19.37% and -19.37% respectively, of which the unit labor cost per piece and the unit material cost per piece were -19.37% and -30.37%, respectively.
The construction of conductive substrate project is started, and phase I of 2022q3 is expected to be put into operation. In 2021, the company’s fund-raising project “silicon carbide semiconductor material project” officially started construction in Shanghai Lingang Holdings Co.Ltd(600848) city. The project is mainly used to produce 6-inch conductive silicon carbide substrate materials to meet the extensive needs of downstream electric vehicles, new energy grid connection, smart grid, energy storage, switching power supply and other applications of silicon carbide power electronic devices. The first phase of the project is expected to be put into operation in 2022q3, and it is planned to reach production in 2026. After that, the production capacity of silicon carbide substrate materials will be increased by about 300000 pieces / year.
We increased investment in research and development, and made breakthroughs in key indicators of large-size substrates and conductive substrates. In 2021, the company’s R & D expenses were 737361 million yuan, a year-on-year increase of + 62.05%, and the R & D expense rate was 14.93%. Relying on R & D projects such as “project B” and “8-inch wide band gap silicon carbide semiconductor single crystal growth and substrate processing key technology project”, the company has made breakthroughs in accelerating the R & D of large-size silicon carbide substrate and improving the key indicators of conductive substrate.
Smart factory is incorporated into the future strategy to help improve the quality and increase production of silicon carbide substrate. Due to the high growth temperature of silicon carbide and many influencing factors, the technical iteration cycle is relatively long. The company plans to adopt AI and digital twin to build a digital chemical plant, conduct process technology simulation in the digital plant, and verify the simulation results in the physical plant, so as to achieve the linkage between digital and physical plant, compress technology iteration and improve the speed of R & D Shanghai Lingang Holdings Co.Ltd(600848) conductive substrate project is expected to become a test field of smart factory and help the company improve the quality and increase production of silicon carbide substrate.
Profit forecast: we expect the net profit attributable to the parent company in 2022, 2023 and 2024 to be 158 / 182 / 214 million yuan respectively, corresponding to 132 / 114 / 97 times of the share price PE on April 1. It is covered for the first time and given a “buy” rating.
Risk tip: the R & D of conductive substrate is less than expected, and the yield improvement is less than expected.
