\u3000\u3 Bohai Water Industry Co.Ltd(000605) 358 Hangzhou Lion Electronics Co.Ltd(605358) )
Event: the company released the first quarter report of 2022. The company’s revenue in the first quarter was 756 million yuan, up 63.86% year-on-year and down 4.06% month on month; The net profit attributable to the parent company was 238 million yuan, with a year-on-year increase of 214.02% and a month on month increase of 21.5% 43%； Net profit deducted from non parent company was 234 million yuan, with a year-on-year increase of 253.16% and a month on month increase of 11.5% 43%。
Q1 revenue increased significantly year-on-year and profitability continued to improve: the company’s Q1 revenue increased significantly year-on-year and was nearly flat month on month, mainly due to the high prosperity of the semiconductor industry, the acceleration of domestic substitution, the release of the company’s new production capacity, and the simultaneous rise of volume and price of products compared with the same period last year. In terms of profitability, the net profit attributable to the parent company in Q1 increased by more than 20% month on month, and the gross profit margin and net profit margin in Q1 were 50.5% respectively 26%、32. 85%, an increase of 9.29 PCT and 15.5% respectively year-on-year 56pct, increased by 3.51pct and 6.96pct month on month, and the profitability continued to improve, mainly due to the prominent overall scale effect of the company and the increase of product prices. The overall gross profit margin and net profit margin of the company have been continuously improved for several consecutive quarters since 20q4. Looking forward to 2022, the high boom of semiconductor silicon wafer is expected to continue. With the rapid release of the company’s 12 inch new capacity, the company’s performance is expected to continue to grow at a high rate.
The production and sales of semiconductor silicon wafers are booming, and 12 inch silicon wafers are expected to rise rapidly: on semiconductor silicon wafers, according to the announcement, the company’s 6-inch silicon wafer production line and 8-inch silicon wafer production line are in full load operation for a long time, especially the company’s characteristic 6-inch and 8-inch heavily doped silicon epitaxial wafers with special specifications are in short supply. By the end of 2021, 12 inch silicon wafers have reached the production capacity of 1.8 million wafers per year, and large-scale production and sales have been realized. The technical capacity has covered more than 14nm technical nodes, logic circuits, image sensor devices and power devices have covered the technical nodes required by customers, and large-scale shipments have been made. At present, the main products sold include polished wafers, test wafers and epitaxial positive wafers. At the same time, the verification of customer sample delivery and the climbing of production and sales are continuing. With the introduction of 12 inch customers and the release of new capacity, shipments are expected to start rapidly.
Investment suggestion: we expect the company’s revenue from 2022 to 2024 to be 37.5% respectively 9.1 billion yuan, 5.0 billion yuan RMB 0 billion, RMB 6.3 billion 0.8 billion yuan, and the net profit attributable to the parent company was 0.9 billion yuan respectively RMB 6.4 billion, RMB 1.2 billion RMB 8.4 billion, RMB 1.66 billion 1.7 billion yuan, maintaining the “Buy-A” investment rating.
Risk warning: downstream demand attenuation risk, market competition risk, raw material price rise risk, and the risk that the production capacity is not up to expectations.
