Tuojing Technology (688072)
Key points supporting rating
Management team: rich experience in international semiconductor equipment. The technical team including the founder, chairman and general manager of the company has 40 years of rich industry experience in CVD, ALD, measurement, etching and other equipment and processes of Fanlin, nuofer, Mattson and Intel.
Market positioning: focus on thin film deposition equipment and process, and the target customers are mainstream wafer manufacturing customers outside China. The company’s core products include PECVD, ALD and sacvd. The total value of the three products accounts for about 1 / 2 of the film deposition equipment (CVD + PVD + ECD), accounting for about 10% of WFE. The company’s core customers include Semiconductor Manufacturing International Corporation(688981) , Huahong group, Changjiang storage, Changxin storage, Xiamen Lianxin, Yandong microelectronics and other mainstream wafer factory customers at home and abroad. It has been widely used in the manufacturing line of integrated circuits with processes of 14nm and above in Chinese wafer factories, and has carried out the verification test of products with processes of 10nm and below.
Market position: leading the localization of dielectric film deposition equipment. Founded in 2010, it is a well-known semiconductor process equipment manufacturer in China like Naura Technology Group Co.Ltd(002371) , shengmei, Zhongwei, Kingsemi Co.Ltd(688037) , and Huahai Qingke, leading the localization of dielectric film deposition equipment. According to the prospectus, PECVD’s main competitors are applied materials and lamresearch. Tuojing accounts for 17% of the market share of some local production lines; Sacvd’s competitor is applied materials, and tuojing’s market share is 25%; ALD’s main competitors are ASMI and lamresearch. In 2021, tuojing’s revenue exceeded the threshold of $100 million.
Bottom Technology: the eight core technologies independently developed have reached the international advanced level. The company’s eight core technologies include advanced film process equipment design, reaction module architecture layout, high-capacity platform of semiconductor manufacturing system, plasma stability control technology, design of key components in reaction chamber, gas transportation control system of semiconductor deposition equipment, design of gas high-speed conversion system and design technology of gas high-speed conversion system. At present, tuojing has developed and produced PECVD equipment with 16 different processes, sacvd equipment with 3 different processes, PE-ALD has been mass produced and thermal ALD is under development.
Financial performance: abundant orders, high revenue growth, gross profit margin rose to 44%. By the end of 2021, the contract liabilities were 488 million yuan, a significant increase compared with 134 million yuan in 2020. The company’s revenue increased from 71 million yuan in 2018 to 758 million yuan in 2021, with a compound growth rate of 120%. In 2022q1, the revenue guideline was 100120 million yuan, with a year-on-year increase of 73% – 108%.
Growth Logic: the increase of market share is superimposed on the long-term growth of semiconductor equipment industry outside China. In 2022, the global WFE market was about 100000000000 US dollars, of which the market scale of the thin film deposition equipment was about 20 billion US dollars. The three products of the top three products could cover nearly 7 billion 500 million dollars in the global market, and about 15-22.5 billion in the Chinese mainland market.
Investment advice
It is expected that the compound growth rate of revenue in the next three years will reach 50%. The corresponding market value of IPO pricing is equivalent to 7 times and 5 times of PS valuation in 22 and 23 years. It has significant valuation advantages compared with the industry average. It is covered for the first time and given a buy rating.
Main risks of rating
Cyclical risk of semiconductor equipment industry; Risk of global shortage of parts supply; There is no business decision-making risk of controlling shareholders and actual controllers.
