\u3000\u3 Shengda Resources Co.Ltd(000603) 324 Shanghai Sheng Jian Environment Technology Co.Ltd(603324) )
Event:
Shanghai Sheng Jian Environment Technology Co.Ltd(603324) issue annual report and first quarterly report:
1) in 2021, the operating revenue reached 1.233 billion yuan, with a year-on-year increase of 31.49%; The net profit attributable to the parent company was 152 million yuan, with a year-on-year increase of 25.28%.
2) 2022q1: revenue of 189 million yuan, an increase of 7.53% year on year; The net profit attributable to the parent company was 14 million yuan, with a year-on-year increase of 17.81%.
Key investment points:
In the application field of photoelectric display and integrated circuit, two wheel drive, with orders on hand reaching 1.022 billion yuan. In 2021, the revenue of the company’s photoelectric display and integrated circuit industries accounted for 42.89% / 46.52% of its main business respectively, and the “two wheel drive” pattern has been realized. The company benefits from the domestic substitution in the pan semiconductor field and the industrial low-carbon environmental protection requirements, and the order demand is full. In 2021, the total amount of new orders signed by the company was 1.438 billion yuan (including tax), a year-on-year increase of 55.44%. At present, the amount of orders in hand is about 1.022 billion yuan (including tax, including contracts that have won the bid but not signed and intentional orders), providing a solid foundation for subsequent business development. Driven by strong demand, the company’s net profit in 2021 was 25.28% year-on-year and that in 2022q1 was 17.81% year-on-year.
Increase R & D investment and make progress in the auxiliary equipment of Pan semiconductor process. In 2021, the company invested 56 million yuan in R & D, a year-on-year increase of 44.36%. Up to now, the company and its subsidiaries have a total of 243 valid patents, including 6 invention patents, 221 utility model patents, 15 software registrations and 1 design patent. The “domestic semiconductor process auxiliary equipment and key parts project” invested by the company through IPO is planned to be invested and constructed in two phases, aiming to build a domestic advanced semiconductor auxiliary equipment platform integrating R & D, manufacturing, sales and maintenance services. In 2021, the sales volume of the company’s Pan semiconductor process auxiliary equipment increased steadily, realizing a revenue of 162 million yuan, a year-on-year increase of 424.88%. The company’s wet electronic chemical supply, recovery and regeneration system business realized an operating revenue of 86 million yuan, with a year-on-year increase of 70.75%, and realized the in plant recovery and regeneration of PGMEA components.
The company’s main production capacity construction is located in Jiangsu, or less affected by the epidemic. According to the prospectus, in 2016, the company purchased land in Kunshan City, Jiangsu Province to prepare for the construction of R & D and manufacturing base. After the completion and operation of Jiangsu Shengjian R & D and manufacturing base, the company has the ability to comprehensively and systematically solve the waste gas of Pan semiconductor process. Among the IPO raised investment projects, the total investment of Jiangsu base environmental protection equipment intelligent manufacturing project / Shanghai new technology R & D and construction project / Shanghai headquarters operation center construction project is 226 million yuan / 214 million yuan / 68 million yuan. The main production capacity construction is still located in Jiangsu or less affected by covid-19 epidemic.
Profit forecast and investment rating companies have obvious advantages in the field of Pan semiconductor process waste gas treatment. With the continuous expansion of downstream semiconductor wafer factories, the company is expected to continue to benefit. We estimate that the operating revenue of the company from 2022 to 2024 will be RMB 1.722/2.396/3.149 billion respectively, with a year-on-year growth rate of 40% / 39% / 31%, and the net profit attributable to the parent company will be RMB 214 / 3.15/427 million respectively, with a year-on-year growth rate of 40% / 47% / 35%, corresponding to 20 / 14 / 10 times of PE from 2022 to 2024, maintaining the “buy” rating.
Risk warning: the localization process is not as expected; The price of raw materials has risen sharply; Downstream application expansion is less than expected; The aggravation of the epidemic situation affects the operating rate; Sino US trade friction.
