\u3000\u3 Guocheng Mining Co.Ltd(000688) 012 Advanced Micro-Fabrication Equipment Inc.China(688012) )
On March 30, Advanced Micro-Fabrication Equipment Inc.China(688012) released its annual report. The company achieved an operating revenue of 3.108 billion yuan in 2021, a year-on-year increase of 36.7%; The net profit attributable to the parent company was 1.011 billion yuan, a year-on-year increase of 105.5%; The non net profit deducted was 324 million yuan, a year-on-year increase of 1291.1%.
Revenue continued to increase and profitability improved significantly. In 2021, the company’s operating revenue was 3.108 billion yuan, with a year-on-year increase of 36.7%, mainly due to the significant growth of etching equipment revenue. The company achieved an annual revenue of 2.004 billion yuan of etching equipment, a year-on-year increase of 55.4%. In terms of MOCVD equipment, the company launched new products for miniled in June 2021, but the newly signed orders have not yet formed large-scale revenue, with an annual revenue of 503 million yuan, a year-on-year increase of 1.5%. In the whole year, the company signed 4.13 billion yuan of new orders, an increase of 90.5% year-on-year, and the contract liabilities were 1.372 billion yuan, an increase of 131.8% year-on-year.
On the profit side, the company’s annual profit margin increased strongly. The gross profit margin increased by 6 PCT to 43.4% year-on-year, mainly due to the gross profit margin of MOCVD equipment increased by 15 PCT to 33.77% year-on-year, and the proportion of etching revenue increased. The gross profit margin of etching equipment was 44.3%, which was consistent with the same period last year. Thanks to this, the net profit deducted by the company in the whole year reached 324 million yuan, with a year-on-year increase of 1291.1% and a net interest rate of 10.4%. At the same time, the company launched a new phase of equity incentive plan. On March 29, the company granted 4 million shares of the company’s shares to 1104 employees at a one-time price of 50 yuan / share, covering 99.4% of the total number of employees of the company, and shared the company’s growth achievements with employees.
CCP technology continues to lead, and ICP has made breakthrough progress. In 2021, the company maintained the leading edge in the field of CCP etching. Its products are used in the 5nm chip production line and the next generation pilot production line of overseas first-line customers, and its share has entered the top two in some key customers. In 2021, the shipment volume reached 298 cavities, with a year-on-year increase of 40%, and the orders for 3D NAND increased steadily.
At the same time, the company’s ICP etching equipment also ushered in breakthrough progress. It passed the process verification of many customers and obtained repeated orders. The annual shipment volume was 134 cavities, with a year-on-year increase of more than 235%. ICP devices for logic chip below 5nm, DRAM chip 1x nm process and 3D NAND layer above 128 are also under development.
MOCVD new products have full orders and various film deposition new products have been verified by customers. The MOCVD equipment for miniled launched by the company in June 2021 received batch orders of more than 100 cavities within half a year, and the market promotion results are gratifying. The company has also actively arranged the third generation semiconductor MOCVD equipment for power device applications. MOCVD for GaN has been delivered for verification, and the research and development of SiC epitaxial MOCVD equipment has been started.
In addition to the two main businesses of etching and MOCVD, the expansion of the company’s product line has been steadily promoted. LPCVD equipment for tungsten contact hole filling has been delivered to customers for verification, and EPI equipment for Gesi epitaxy has entered the stage of prototype design, manufacturing and commissioning. In addition, the company is also planning to develop key process equipment such as ALD equipment and ale, and the product matrix is expected to continue to expand.
Investment suggestion: we expect the company’s revenue in 2022, 23 and 24 to be 4.618/62.82/8.471 billion yuan respectively, and the corresponding current price PS is 16 / 11 / 9 times respectively. Considering the company’s market position as the leader of China’s semiconductor equipment, it is expected to enjoy downstream expansion and localization dividends and maintain the “recommended” rating.
Risk warning: product verification is not as expected; Cyclical fluctuations in downstream industries; Intensified market competition
