\u3000\u3 Guocheng Mining Co.Ltd(000688) 012 Advanced Micro-Fabrication Equipment Inc.China(688012) )
Event:
On March 31, 2022, the company released its annual report for 2021: the company’s operating revenue in 2021 was 3.108 billion yuan, a year-on-year increase of 36.72%; The net profit attributable to the parent company was 1.011 billion yuan, a year-on-year increase of 105.49%; The net profit deducted from non parent company was 324 million yuan, with a year-on-year increase of 129110%; The gross profit margin was 43.36%, with a year-on-year increase of 5.69pcts; The net interest rate was 32.54%, with a year-on-year increase of 10.88pcts.
The company’s operating revenue in 2021q4 was 1.035 billion yuan, with a quarter on quarter increase of 41.03% and a year-on-year increase of 29.91%; The net profit attributable to the parent company was 470 million yuan, with a quarter on quarter increase of 223.34% and a year-on-year increase of 118.14%; The net profit deducted from non parent company was 159 million yuan, with a quarter on quarter increase of 54.36% and a year-on-year increase of 131.82%; The gross profit margin was 44.71%, with a quarter on quarter increase of 1.40 PCTs and a quarter on quarter increase of 1.69 PCTs; The net interest rate was 45.36%, with a quarter on quarter increase of 25.59 PCTs and a year-on-year increase of 18.34 PCTs.
Comments:
Benefiting from the development of semiconductor equipment market and the competitive advantages of products, the company’s net profit deduction and new orders increased significantly in 2021.
The company’s operating revenue in 2021 was 3.108 billion yuan, with a year-on-year increase of 36.72%, growing rapidly; The net profit attributable to the parent company was 1.011 billion yuan, a year-on-year increase of 105.49%; The net profit deducted from non profit was 324 million yuan, with a year-on-year increase of 1291.1%, realizing a substantial increase.
Among them, the non recurring profit and loss is 687 million yuan, which comes from (1) due to the change of Semiconductor Manufacturing International Corporation(688981) share price and the reduction of Semiconductor Manufacturing International Corporation(688981) shares held by the company, the company’s income in 2021 is about 39 million yuan, a decrease of about 223 million yuan compared with 262 million yuan in 2020; The equity of other non listed companies invested by the company (measured at fair value and the changes are included in the current profit and loss) generated about 370 million yuan of income from changes in fair value in 2021, an increase of about 370 million yuan compared with 2020. Due to the combined influence of the above two factors, the pre tax profit of the company increased by about 147 million yuan in 2021 compared with 2020; (2) The government subsidies included in non recurring profits and losses of the company in 2021 increased by about 95 million yuan compared with 2020.
In terms of business, the revenue of etching equipment increased by nearly 56% year-on-year in 2021: benefiting from the development of semiconductor equipment market and product competitive advantages, the revenue of etching equipment of the company in 2021 was 2.004 billion yuan, an increase of about 55.44% compared with 2020, and the gross profit margin reached 44.32%; Due to the downstream market and the unrecognized revenue of the newly signed Mini ledmocvd equipment scale orders this year, the revenue of MOCVD equipment in 2021 was 503 million yuan, an increase of about 1.53% over 2020, but the gross profit margin of MOCVD equipment reached 33.77%, a significant increase from 18.65% in 2020.
The company’s orders were in good condition. In 2021, the new orders were 4.13 billion yuan, an increase of 90.5% year-on-year, and the contract liabilities were 1.372 billion yuan, an increase of 53.7% year-on-year. The amount of new orders signed by the company in 2021 was 4.13 billion yuan, an increase of about 1.96 billion yuan, an increase of about 90.5% year-on-year, and the growth rate was fast; The contract liabilities of the company in 2021 were 1.372 billion yuan, with a year-on-year increase of 53.7%; The company’s inventory in 2021 was 1.762 billion yuan, a year-on-year increase of 6.3%.
Etching equipment: the market share of CCP etching machine continues to increase, ICP etching machine has entered the mass production period, and ale equipment is under planning and development.
CCP etching machine: the company’s CCP etching equipment products maintain a competitive advantage. Primoad RIE, primosscadri, primohd RIE and other products are applied in batch to the integrated circuit processing and manufacturing production lines of front-line customers outside China, and continue to improve the market share. The market share of some customers has entered the top three. In 2021, the company produced and shipped 298 cavities of CCP etching equipment, with a year-on-year increase of 40%. In addition, in terms of advanced logic circuits, the company has successfully obtained repeated orders for logic circuit production lines of 5 nm and below. In terms of storage circuits, the company’s etching equipment is widely used in 64 layer and 128 layer 3dnand production lines. With the rapid increase of the capacity of 3dnand chip manufacturing plant, the repeated orders of these products have increased steadily. At the same time, the company actively laid out the application of dynamic memory and began process development and verification. The company actively cooperates with mainstream customers to define the main functions and technical indicators of the next generation CCP etcher, and is developing more advanced CCP etcher products.
ICP etching machine: the company’s ICP etching equipment has gradually matured. Primonanovaicp etching products have been verified by more than 100 ICP etching processes on the production lines of more than 15 customers. The etching performance and mass production indicators of some processes have met the requirements of customers and have been put into mass production, and continue to be extended to the verification of more etching applications. By the end of December 2021, primonanova has successfully delivered more than 180 reaction chambers, and the number of applications verified at the client is also increasing. In 2021, the company produced and shipped 134 chambers of ICP etching equipment, with a year-on-year increase of 235%.
In addition, the company’s ale (atomic layer etching) advanced key equipment is under development.
MOCVD equipment: MOCVD equipment for mini LED has received batch orders, the third generation semiconductor and
MOCVD equipment for micro LED is advancing steadily. The company’s blue light lighting prismoa7 and deep UV LED epitaxial prismohit3 products continue to serve customers. In June 2021, the company officially released the MOCVD device prismonimax for mass production of high-performance Mini led. Within half a year, the company has received batch orders from many leading customers in China, totaling more than 100 cavities, and continues to receive more orders. The company has also actively arranged the third generation semiconductor equipment for power device applications, and launched the development of MOCVD equipment applied to the production of power devices and micro LEDs. Among them, the MOCVD equipment developed for the mass production application of Gan power devices has been delivered to leading customers at home and abroad for production verification. In addition, the company has launched the development of epitaxial production equipment applied to silicon carbide power devices, which will further enrich the company’s product line, Further consolidate and enhance the company’s leading market position in MOCVD products.
Thin film deposition equipment: Tungsten filled CVD has achieved phased results, and the development of CVD, ALD and EPI equipment has made good progress. The company’s Tungsten filled CVD equipment has made phased progress, which has been able to meet the needs of customers’ process verification, and the products are being verified with key customers. Based on tungsten CVD equipment, the company is further developing CVD and ALD equipment to achieve higher aspect ratio and smaller filling of key size structures, so as to meet the needs of high-end logic devices and advanced memory chips. At present, the company’s EPI equipment has entered the design, manufacturing and commissioning stage of the prototype to meet the electrical and reliability requirements of the germanium silicon epitaxial growth process in the advanced manufacturing process of customers.
Other equipment business layout: in the active promotion of VOC purification equipment, Ruili instrument has increased capital to layout the front detection business and expand the key equipment in the field of display, MEMS, power devices, Cecep Solar Energy Co.Ltd(000591) and other pan semiconductor fields. While focusing on the main business, the company continues to actively explore the extension development. The subsidiary Zhongwei Huichuang has developed and manufactured large-scale VOC purification equipment for Industry by using the chemical reactor based on the adsorption principle of molecular sieve, and signed a strategic cooperation agreement with Das environmental experts Co., Ltd. in Germany. The two sides will carry out close cooperation in the field of tail gas treatment equipment in the semiconductor industry. The company completed the capital increase of 100 million yuan for Ruili instrument in 2021q1, accumulatively held 20.45% shares of Ruili instrument, and appointed Yin Zhiyao as the chairman of Ruili instrument. It plans to increase the capital by 108 million yuan in March 2022. After the completion of the transaction, the shareholding ratio will be increased to 29.36%. The layout of the field of integrated circuit process testing equipment is conducive to expanding the business scope of the company. The company plans to expand the application of equipment in Pan semiconductor field, including key equipment in layout display, MEMS, power devices and Cecep Solar Energy Co.Ltd(000591) field; The company plans to explore opportunities in other emerging fields, take advantage of unique equipment and process technology, consider opportunities from equipment manufacturing to large-scale production of devices, and explore market opportunities in more environmental protection equipment and medical and health intelligent equipment related to integrated circuit and pan semiconductor equipment production lines.
Profit forecast, valuation and rating: Advanced Micro-Fabrication Equipment Inc.China(688012) is the leading enterprise of etching equipment and MOCVD equipment in China. We continue to be optimistic about the company’s strong endogenous technical strength and extension expansion ability. Considering the rapid progress of ICP etching machine and film deposition equipment, the company’s net profit attributable to the parent company from 2022 to 2023 is increased to 1.073 billion yuan (up 40.63%) and 1.272 billion yuan (up 20.11%), and the net profit attributable to the parent company in 2024 is expected to be 1.54 billion yuan, The PE values corresponding to the current market value are 67x, 56x and 46x respectively, maintaining the “buy” rating.
Risk tip: the expansion of Wafer Factory is less than expected, the introduction of customers is less than expected, and the technology research and development is less than expected.
