\u3000\u3000 Tianjin Zhonghuan Semiconductor Co.Ltd(002129) (002129)
Event overview
The company issued a share repurchase plan for the company, which plans to repurchase the company’s shares, with a total amount of no less than 355 million yuan and no more than 391 million yuan, and the repurchase price of no more than 61.55 yuan / share (inclusive), which is intended to be used for the implementation of employee stock ownership plan or equity incentive.
Analysis and judgment:
The repurchase plan shows development confidence and improves operation quality and efficiency
The company issued a repurchase plan with a total amount of no less than 355 million yuan and no more than 391 million yuan, and the repurchase price is no more than 61.55 yuan / share (inclusive), which is intended to be used for the implementation of employee stock ownership plan or equity incentive. According to the calculation of the upper limit of the repurchase amount, the number of shares to be repurchased is expected to be about 6352600 shares, accounting for about 0.20% of the current total share capital of the company; According to the calculation of the lower limit of the repurchase amount, the number of shares to be repurchased is expected to be about 5.7677 million shares, accounting for about 0.18% of the current total share capital of the company. We believe that the repurchase plan will further improve the company’s long-term incentive mechanism and fully mobilize the enthusiasm of the company’s core backbone and excellent employees. Under the new system and mechanism, the company’s strategy is clear, the organization team is full of vitality, the operation improves quality and efficiency, and comprehensively improves its competitiveness.
Capital increase subsidiary, G12 product scale promotion accelerated
It is announced to increase capital by 1250 million yuan to its subsidiary Wuxi Zhonghuan Applied Materials Co., Ltd. After the capital increase, the registered capital of Zhonghuan Yingcai will be changed from 1350 million yuan to 2600 million yuan, including 98.08% held by Tianjin huanou and 1.92% held by Yixing Pioneer Park Technology Development Co., Ltd. The fourth 210 chip factory is ready to go, with a total planned chip capacity of more than 105gw, continue to give full play to the competitive advantage of 210 silicon chips, and further consolidate the company’s leading position and market share in the photovoltaic silicon chip market. The company takes advantage of G12 product differentiation to alleviate the cost pressure of downstream customers and improve its competitiveness. In the first three quarters, the market penetration of G12 silicon wafer increased from 6% at the beginning of the year to 20%, and the total single crystal production capacity increased to 73.5gw (of which G12 production capacity accounted for about 59%). At the same time, through technical improvement, the rate of silicon wafer a product has been greatly improved, the gross profit margin of the product has been further improved, the labor productivity and the through rate of G12 production line have been greatly improved, and the per capita labor productivity has reached more than 10 million yuan / person / year.
The semiconductor business has been accelerated and the production capacity has been continuously released
While accelerating the capacity expansion of Jiangsu large silicon wafer project, the company plans to start the production expansion of Tianjin factory. Chinese customers’ orders for 12 inch products increased sharply, and the company released effective capacity by accelerating the commissioning of new production lines. At present, phase I of the 8-12 inch large silicon wafer project has entered the final stage of acceptance, and phase II of the project has been started in advance to accelerate capacity expansion. By the end of the third quarter of 2021, the monthly production capacity of 8-inch 650000 pieces and 12-inch 100000 pieces had been formed, with new layout, small-diameter expansion and 8-inch new product projects. It is expected to achieve the set target of monthly production capacity of 8-inch 750000 pieces and 12-inch 170000 pieces by the end of 2021. The company has signed long-term strategic cooperation agreements with a number of chip manufacturers, laying the foundation for business development. In the first three quarters, the company’s production capacity continued to increase, and the shipment of 8-12 inch polished wafers and epitaxial wafers accelerated.
Investment advice
Under the new system and mechanism, the company has improved its operation quality and efficiency, comprehensively improved its competitiveness, and entered a new stage of development. Its future performance is high, the growth can be expected, and the profit forecast remains unchanged. It is estimated that the company’s revenue from 2021 to 2023 will be 44.108 billion yuan, 63.225 billion yuan and 70.808 billion yuan, the net profit attributable to the parent company will be 4.014 billion yuan, 5.490 billion yuan and 6.455 billion yuan respectively, and EPS will be 124 million yuan, 170 million yuan and 200 million yuan respectively, Corresponding to the closing price of 39.45 yuan / share on January 11, 2022, PE is 32 / 23 / 20 times respectively, maintaining the “buy” rating.
Risk tips
The semiconductor market demand is not as expected, the competition in the semiconductor silicon wafer industry is intensified, systemic risks, etc.
