\u3000\u3 Bohai Water Industry Co.Ltd(000605) 358 Hangzhou Lion Electronics Co.Ltd(605358) )
The performance of the first quarter report showed high growth and sufficient growth momentum, maintaining the “buy” rating
The company released the first quarterly report of 2022 on April 11, 2022, and realized a revenue of 756 million yuan in 2022q1, a year-on-year increase of + 63.86% and a month on month increase of – 3.98%; 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 + 21.39%; Deduct the non net profit of 234 million yuan, a year-on-year increase of + 253.16% and a month on month increase of + 11.39%; The gross profit margin was 50.26%, with a year-on-year increase of + 9.29 PCTs and a month on month increase of + 3.51 PCTs. The company’s 2022q1 performance increased rapidly, mainly due to the continuous increase of downstream demand driven by national policies, the acceleration of domestic substitution of semiconductors and the rapid development of intelligent economy during the reporting period, the company’s full orders, the production and sales volume of main products increased significantly, the company optimized product structure, increased cost control and steadily improved profitability. The company has sufficient growth momentum. We maintain the profit forecast from 2022 to 2024. The net profit attributable to the parent company from 2022 to 2024 is expected to be RMB 941 / 13.37 / 1.671 billion, EPS is expected to be RMB 2.06/2.92/3.65, and the corresponding PE of the current stock price is 40.3/28.4/22.7 times, maintaining the “buy” rating.
The downstream is highly prosperous. At the same time, it plans to acquire Guojing semiconductor to enhance the competitiveness of the company and have sufficient growth momentum
According to semi data, it is expected that more than 30 12 inch wafer plants will be added in the world from 2020 to 2024. With the release of new capacity of wafer plants from the middle of 2022, the demand for silicon wafers will increase significantly. The company plans to acquire Guojing semiconductor under Tuozhong shares. After the acquisition, the company plans to obtain 58.69% equity of Guojing semiconductor and 41.31% equity of Jiaxing Kangjing. Guojing semiconductor is mainly engaged in the research and development, production and sales of 12 inch lightly doped polished silicon wafers for integrated circuits. It is planned to build an annual production capacity of 4.8 million wafers in two phases. At present, all infrastructure construction has been completed and the line was opened on January 9, 2022. It is the first fully automatic 12 inch semiconductor silicon wafer production line in China, and is in the stage of customer introduction and product verification. This reorganization will expand the production scale of the company’s existing 12 inch silicon wafer; At the same time, Guojing semiconductor has world-class plants, equipment and technical team, and has established crystal growth laboratory, physics, chemistry and Application Laboratory, which will form complementary advantages and resource sharing with the company in technology. At present, the silicon wafer industry is highly prosperous, the delivery time of silicon wafer related production equipment is extended, and the production capacity of silicon wafer manufacturers is in short supply. The merger and acquisition of mature production lines is conducive to the company’s rapid improvement of production capacity, and the company’s market position in 12 inch silicon wafers, especially light doped silicon wafers, is improved in the context of domestic substitution. We believe that silicon wafers will continue to be in short supply in 2022. With the urgent demand for domestic substitutes, the company will usher in great development opportunities.
Risk tip: the downstream prosperity is less than expected, the product verification is less than expected, and the industry competition is intensified.
