\u3000\u30 Guangdong Tengen Industrial Group Co.Ltd(003003) 46 Jiangsu Nata Opto-Electronic Material Co.Ltd(300346) )
Event: the company released its 2021 annual report on March 31, realizing an operating revenue of 984 million yuan, a year-on-year increase of 65.46%; The net profit attributable to the parent company was 136 million yuan, a year-on-year increase of 56.55%; Deduct non net profit of 70.42 million yuan, a year-on-year increase of 3225.7%.
In addition, the company also released the performance forecast for the first quarter on the same day. It is estimated that the net profit attributable to the parent company is 70-83 million yuan, a year-on-year increase of 64.33-94.85%, and the net profit attributable to the parent company after deduction is 54-67 million yuan, a year-on-year increase of 67.57-107.92%.
Based on the key materials of wafer manufacturing process, the continuous high growth is the best evidence of the industry leader. Since our first report at the end of 2018 achieved Jiangsu Nata Opto-Electronic Material Co.Ltd(300346) coverage, the company has achieved sustained high growth in revenue and profit for four consecutive years. Behind the data growth is the diversified development of Jiangsu Nata Opto-Electronic Material Co.Ltd(300346) product system and the continuous leap of products from low-level to high-level and higher technological content. In the company’s own industry, Mo source market, the company is undoubtedly the global No.1. While continuously consolidating the market share of the traditional LED industry, the company continues to actively expand the application of the third generation semiconductor and photovoltaic market, and also continues to expand the application proportion of semiconductor precursors in the independent control of China’s advanced processes. Hydrogen and fluorine special gases are the main power sources for the growth of the company in recent years. In recent years, they have been closely following the market and customer demand, continuously expanding production capacity and rapidly completing product upgrading and iteration. ARF photoresist, which is most concerned by the market, has been steadily and steadily, realizing the gradual certification of key customers in China and small batch import, laying a solid foundation for large-scale mass production in the future.
It is easy to see that based on the key materials of semiconductor wafer manufacturing process, the company continues to expand its product boundaries in three key fields: Advanced precursor materials, electronic special gas, photoresist and supporting materials. Relying on the industrial applications in the fields of downstream integrated circuits, flat panel displays, LEDs, third-generation semiconductors and photovoltaic, the company continues to expand its share in mature fields and strive to be a global leader; Other fields strive to break the technology monopoly of overseas manufacturers and become the leading force of localization substitution. Such a development idea is an important guarantee for Jiangsu Nata Opto-Electronic Material Co.Ltd(300346) to open up its own world in the closed pattern of a large number of overseas material manufacturers, and it is also an important premise for us to continue to be optimistic about the company.
ARF photoresist has entered a critical introduction period. Photoresist process is the most critical process guarantee in the wafer manufacturing process, and ARF photoresist is a high-order material second only to EUV. Because it is directly related to the subsequent graphic process and process nodes, its fineness has an intuitive impact on the overall yield and device performance of wafer manufacturing. Therefore, both the wafer foundry and the end customer are very cautious about the supplier and material replacement of photoresist. The company obtained the national photoresist 02 special project from 2017 to 2018 and passed the acceptance of the national 02 special project group from 2020 to 2021. Several key R & D products of Ningbo Jiangsu Nata Opto-Electronic Material Co.Ltd(300346) have also passed the technical verification of key customers. In addition, several products are cooperating with customers in the verification and adjustment process. In theory, if the progress is smooth, driven by the independent demand of Chinese wafer factories, the capacity digestion of the company’s current production line with an annual output of 25 tons is natural. We look forward to the company’s continuous advancement in the field of photoresist and supporting materials.
Special gas has been the core support of the company’s revenue, and feiyuan gas will still maintain steady growth. Throughout the company’s major product lines, special gas has maintained nearly doubled revenue growth in recent five years, from 35.71 million in 2017 to 731 million in 2021. At present, the proportion of total revenue has reached 74.27%. Of course, there is a positive impact of the consolidation of flying source gas, but the growth of the company’s own hydrogen special gas is also very considerable. In 2021, the overall sales growth of the company’s phosphine and arsane products reached 64.09%. Compared with the international old competitors, the quality, production capacity and sales volume are not weak, and the overall strength has ranked among the top in the world. The flying source gas acquired by the company in 2019 also makes great progress in the field of fluorine special gas. In particular, the production capacity of nitrogen trifluoride has been expanded from 1000 tons to 4000 tons, ranking second in China and third in the world. Under the current background of strong supply and demand of NF3 in the panel industry, considering the company’s continued expansion in Ulanqab and other places in the later stage, the prosperity of the company’s fluorine special gas is expected to continue.
Profit forecast and rating: maintain the buy rating Jiangsu Nata Opto-Electronic Material Co.Ltd(300346) in the preparation field of key semiconductor materials in China, it is a company with very characteristics: first, it has a solid foundation: there are many business lines with different product systems and international competitiveness, and the localization substitution rooted in the corresponding segments can well provide profit and growth guarantee for listed companies. Second, accumulate and develop: in the subdivided fields of different products, such as photoresist, special gas, precursor, etc., there are good technical reserves and customer promotion step by step, which can not only solve the key neck problems for China’s semiconductor industry, but also become a new driving source of large-scale growth of the company; Third, the leading effect. In some products such as Mo source, hydrogen and fluorine special gas, it has become the first or forefront in the world, which has laid a good industry position and social recognition for the company, and also laid a good foundation for the growth of other subsequent products. Looking at A-share semiconductor material companies, few of them can achieve the above points, which is also the main reason for the company’s high market recognition and valuation. We predict that the company is expected to achieve a net profit of 274 million, 361 million and 455 million yuan from 2022 to 2024. The current market value corresponds to the valuation of 60.88, 46.18 and 36.60 times, maintaining the company’s buy rating.
Risk tips: 1) the demand recovery of LED industry downstream of Mo source is not as expected; 2) The promotion of downstream customers of special gas is less than expected; 3) The certification progress of important downstream customers of semiconductor precursor materials and photoresist is less than expected; 4) The expansion progress of flying source gas production is affected by the epidemic situation or other unexpected factors, resulting in less than expected capacity release; 5) The company’s products are subject to negative drag such as compensation due to dangerous accidents caused by customers or other improper operation factors.
