\u3000\u3 Guocheng Mining Co.Ltd(000688) 383 Shenzhen Xinyichang Technology Co.Ltd(688383) )
Led by ED solid crystal equipment, the performance has accelerated significantly. From the early capacitor aging test intelligent manufacturing equipment, the company has successfully developed the fields of LED crystal fixing machine, semiconductor crystal fixing machine, wire bonding machine and lithium battery equipment. On March 28, 2022, the company released the operating data for the first quarter of 2022, and realized a net profit attributable to the parent company of 65-70 million yuan, an increase of about 68.66% - 81.63% over the same period of the previous year. The performance acceleration trend is obvious, mainly due to the significant increase in the company's revenue from traditional LED Solid Crystal machines, mini LED equipment and semiconductor equipment compared with the same period of the previous year.
Traditional LEDs steadily increase their share, and the rise of mini LEDs opens up new space. As a new generation of display technology, mini LED has multiple excellent performances, the penetration of downstream applications has been improved, and multi brand Mini LED products have been released one after another. The global Mini LED market is expected to exceed US $1 billion in 2022. A virtuous circle has been formed in the upstream and downstream of the industrial chain, and the investment expenditure of downstream manufacturers has accelerated significantly. According to the new display data of Gaogong, the new investment in mini / micro led and other fields soared to RMB 75 billion in 2021, of which the midstream packaging end is the focus of investment, which will drive the increase of equipment demand represented by solid crystal. As the global leader of mini led solid crystal equipment, the company will take the lead in benefiting from the incremental demand of mini led and bring new growth impetus to the company's performance.
The wave of localization substitution helps the company's semiconductor business expansion. Benefiting from the support of national policies, the localization and substitution of semiconductor back-end sealing and testing equipment has accelerated. Based on its deep technical strength and high-quality customer resources, the company has launched semiconductor power chip solid crystal equipment. The equipment has been recognized by well-known companies in the industry, and semiconductor equipment is expected to become a new growth point in the future.
Epitaxial M & A expands the wire welding machine and opens up new growth space. At present, in the whole field of packaging equipment, the proportion of wire bonding machine is as high as 23%, which is higher than the scale of solid crystal equipment. However, the degree of localization is lower than that of other packaging equipment, and the domestic substitution space is broad. Through the acquisition of Shenzhen kaijiu, the company plans to launch led and semiconductor wire bonding machines within this year, which is expected to break the monopoly of overseas enterprises, help the company realize the collaborative sales of solid crystal and wire bonding equipment, effectively expand the company's product application and market space in the sealing and testing process, and help the company's diversified growth in the future.
Profit forecast
"Buy" rating is given for the first time. We expect that the company will realize a net profit attributable to the parent company of RMB 231 / 289 / 386 million in 202123, with a year-on-year increase of 114.6% / 25.0% / 33.6%, corresponding to EPS of 2.26/2.83/3.77, and PE valuation of 35.46/28.36/21.23 times in 21-23. As the leader of solid crystal equipment, the company deeply benefits from the incremental opportunities brought by the industry and opens up new space in the field of semiconductor equipment.
Risk tips
The downstream demand is less than expected, the market expansion risk of new products, and the localization substitution is less than expected
