\u3000\u30 Chongqing Baiya Sanitary Products Co.Ltd(003006) 66 Konfoong Materials International Co.Ltd(300666) )
The event company released the annual report of 2021 and the first quarterly report of 2022.
The company's performance in 2022q1 increased significantly, exceeding our expectation. In 2021, the company achieved an operating revenue of 1.594 billion yuan, a year-on-year increase of 36.6%, and a net profit attributable to the parent company of 107 million yuan, a year-on-year decrease of 27.5%, which was mainly affected by Semiconductor Manufacturing International Corporation(688981) fair value change profit and loss, with a gross profit margin of 25.56%, a year-on-year decrease of 2.54 PCT. In 2022q1, the company achieved a revenue of 490 million yuan, a year-on-year increase of 54.3%, a net profit attributable to the parent of 33 million yuan, a year-on-year increase of 90.75%, and a net profit not attributable to the parent of 42 million yuan, a year-on-year increase of 94.8%, exceeding market expectations. The substantial growth of revenue and profit is mainly due to the rapid growth of the company's target business and the large volume of parts business. The company's 22q1 gross profit margin was 39.9%, up 1.54pct year-on-year, mainly due to the change of product structure. In the future, with the improvement of the company's gross profit margin and the improvement of cost rate control, we believe that the company's profitability will continue to improve.
The advantages of the company's target business are solid. A variety of new products have been verified by customers. In 2021, the company's tantalum target achieved a revenue of 520 million yuan, an increase of 28.1% year-on-year. The procurement volume of tantalum target in important customers such as TSMC, Hynix, Semiconductor Manufacturing International Corporation(688981) and so on has increased significantly; The revenue of aluminum target was 280 million yuan, with a year-on-year increase of 31.0%, and that of titanium target was 210 million yuan, with a year-on-year increase of 36.0%. Aluminum target and titanium target further showed the advantages of material localization and further expanded their market share. Copper manganese and copper aluminum alloy targets have passed the mass production evaluation of important customers such as TSMC and Huahong Hongli, and successfully began to obtain batch orders. The 6th generation and 8th.5th generation molybdenum targets for LCD and 8th.5th generation copper rotary targets have passed the evaluation of many customers and entered batch application. In 2021, the company launched convertible bonds and fixed increase fund-raising projects, built production bases in Huizhou and Wuhan, grasped the development opportunities of semiconductor and panel targets, expanded production capacity and opened up future growth space.
Shenyang factory was completed and put into operation, and the volume of semiconductor precision parts increased rapidly. In 2021, the company's parts revenue was 180 million yuan, a year-on-year increase of 240.0%. The company has built three parts production bases: Ningbo Yuyao, Shanghai Fengxian and Shenyang Shenbei, of which the new Shenyang factory has been completed and put into operation. The newly developed precision parts and components have been widely used in PVD, CVD, etching machine and other semiconductor equipment. Domestic substitution has been realized in many chip manufacturing enterprises, and key problems have been tackled jointly with semiconductor equipment manufacturing enterprises to achieve batch delivery. The company has formed strategic cooperation with many manufacturers such as China's semiconductor equipment leader Naura Technology Group Co.Ltd(002371) , tuojing technology, Kingsemi Co.Ltd(688037) , Shanghai shengmei, Shanghai microelectronics, Yitang technology, etc., and the newly developed products of various semiconductor precision parts and components have been accelerated.
The investment proposal benefits from the key opportunities of the continuous expansion of the target market and the steady progress of localization and substitution, and the target business of the company will maintain rapid growth. At the same time, the company's semiconductor equipment parts are in rapid volume, and the space for the second growth curve is broad. We maintain the company's profit forecast unchanged. It is expected that the company will realize operating revenue of RMB 2.54 billion, RMB 3.70 billion and RMB 4.94 billion from 2022 to 2024, with a year-on-year increase of 59.4%, 45.7% and 33.5% respectively; The net profit attributable to the parent company was RMB 200 million, RMB 380 million and RMB 570 million, with year-on-year changes of 88.2%, 88.1% and 49.5% respectively; The current share price corresponds to 51.0, 26.8 and 17.9 times PE from 2022 to 2024. Maintain a "recommended" rating.
The risk indicates that the downstream demand is less than expected, and the R & D and application of new technologies are less than expected.
