\u3000\u30 Guangdong Tengen Industrial Group Co.Ltd(003003) 16 Zhejiang Jingsheng Mechanical & Electrical Co.Ltd(300316) )
Matters:
The company disclosed the annual report of 2021. In 2021, the company realized a revenue of 5.961 billion yuan (year-on-year + 56.44%) and a net profit attributable to the parent company of 1.712 billion yuan (+ 99.46%). The company plans to pay a cash dividend of 2.8 yuan (including tax) for every 10 shares. In 2022, Q1 company realized a revenue of 1.952 billion yuan (year-on-year + 114.03%) and a net profit attributable to the parent company of 442 million yuan (year-on-year + 57.13%).
Ping An View:
Overall high growth of income and further improvement of profitability. 1) Revenue side: in 2021, the company’s crystal growth equipment, intelligent processing equipment, sapphire materials and equipment transformation services achieved revenue of 3.475 billion yuan (year-on-year + 32.47%), 1.139 billion yuan (+ 106.61%), 389 million yuan (+ 100.78%) and 362 million yuan (+ 258.20%) respectively. The company’s equipment and materials business has achieved rapid growth. 2) Profit side: in 2021, the gross profit margin of the company’s sales was 39.73% (+ 3.13pct), and the net profit margin attributable to the parent company was 28.71% (+ 6.19pct). Benefiting from the scale effect, the profit margin of the company increased again.
Orders in hand are full and performance growth is supported. By the end of 2021, the total outstanding equipment contracts of the company had reached 20.085 billion yuan (including tax), including 1.068 billion yuan (including tax) for semiconductor equipment contracts. By the end of the 21st century, the company’s contractual liabilities had reached 4.964 billion yuan (year-on-year + 148%), and its inventory was 6.051 billion yuan (+ 134%). This shows that the company’s newly signed equipment orders increased significantly in 2021 and reached a record high. At present, the company has full orders on hand, laying a solid foundation for future performance growth.
In 2022, the revenue target will exceed 10 billion yuan, and the orders for semiconductor equipment and services are expected to exceed 3 billion yuan. According to the company’s annual report, the company’s revenue target in 2022 is to exceed 10 billion yuan. In addition, semiconductor equipment and service orders exceed 3 billion yuan (including tax). We believe that the company has full orders in hand. With the improvement of production capacity and accelerated delivery, there is a great opportunity for the company’s revenue to exceed 10 billion in 22 years. In the semiconductor field, the company has actively arranged the research and development of the four core links of “long crystal, slicing, polishing and CVD”. The existing long crystal, cutting, grinding and polishing equipment of the company has realized mass sales. In recent years, the company has increased the research and development of long crystal, polishing and epitaxial equipment of LPCVD and the third generation semiconductor silicon carbide materials. In 2022, the company’s silicon wafer equipment will enter the harvest period, and 8-inch and 12 inch equipment will successively enter China’s semiconductor silicon wafer enterprises, with a strong growth momentum of follow-up orders.
Investment suggestion: in view of the higher than expected growth of the company’s orders and the improvement of its profitability, we raised the company’s profit forecast. It is expected that the net profit attributable to the parent company will be 2.783 billion yuan, 3.624 billion yuan and 4.544 billion yuan respectively from 2022 to 2024 (the value was 2.191 billion yuan and 2.956 billion yuan from 22 to 23 years ago), and the price earnings ratio corresponding to the current stock price will be 22 times, 17 times and 13 times respectively. Focusing on silicon, silicon carbide and sapphire semiconductor materials and equipment, the company is expected to become a platform company in the industry. We maintain the “recommended” rating.
Risk tips: (1) the capacity expansion of photovoltaic silicon wafer is less than the expected risk. If the capacity expansion of photovoltaic monocrystalline silicon is less than expected, the company will face the risk of order decline. (2) Semiconductor silicon wafer equipment and materials are not progressing as expected. In recent years, the company is actively developing semiconductor silicon wafer equipment and materials. If the R & D progress is less than expected, it will affect the long-term development of the company. (3) The loss of core technical personnel and the risk of core technology diffusion. If the company’s core technical personnel are lost, it may lead to the diffusion of the company’s core technology, thus weakening the company’s competitive advantage and may affect the company’s business development.
