\u3000\u3 Guocheng Mining Co.Ltd(000688) 012 Advanced Micro-Fabrication Equipment Inc.China(688012) )
Event: the company released the first quarterly report of 2022, realizing a revenue of 949 million yuan, yoy + 57.31%; The net profit attributable to the parent company was 117 million yuan, yoy-14.94%; The net profit attributable to the parent company after deducting non profits was 186 million yuan, yoy + 157818%.
Core view: the rapid volume of etching equipment is the core driving factor for the rapid growth of 2022q1 company’s revenue, which is mainly due to the strong market competitiveness and high market recognition of the company in the field of CCP and ICP under the background of domestic substitution of semiconductor equipment. The revenue of MOCVD equipment orders has not been confirmed, resulting in a year-on-year downward trend in single business revenue. However, the company has full orders and obvious growth rate, leading product technology, and the inflection point has reached. The growth rate of net profit and loss attributable to non-government investment decreased significantly, which was mainly due to the sharp decline in the growth rate of current profit and loss attributable to the parent company. The company has several golden tracks with obvious technical advantages and improved operating efficiency. It is expected to accelerate its growth in the future.
The rapid and large-scale production of etching equipment has driven the high growth of the company’s revenue, and the inflection point of MOCVD equipment has reached. In 2022q1, the company’s operating revenue was 949 million yuan, an increase of about 346 million yuan over the same period last year, a year-on-year increase of 57.31%, which confirms that the company is in the golden development period under the trend of domestic substitution of semiconductor equipment. According to the company’s core business by product: ① etching equipment: the revenue is 714 million yuan, yoy + 105.03%, which is the core driver of the company’s revenue growth in 2022q1. On the premise of steady progress in the market position of CCP etching equipment, the company’s ICP etching equipment has made rapid progress, which has verified the company’s strong product competitiveness and high market recognition. It will still be the backbone leading the localization of semiconductor etching equipment in the future. ② MOCVD equipment: the revenue was 42 million yuan, yoy-68.59% of which was mainly due to the unrecognized revenue of newly signed miniledmocvd equipment orders. The company’s MOCVD has sufficient orders on hand. Now the orders on hand are no less than 180 cavities, and will wait for the revenue side to cash in in the future. The company’s new prism Unimax ® MOCVD equipment can achieve excellent wavelength uniformity and stability in the production process of miniled, which will become the key to win the company in the period of miniled explosion.
The company’s net profit deducted from non parent companies increased significantly, fully demonstrating the company’s endogenous business vitality. In 2022q1, the company realized a net profit of 186 million yuan, an increase of 175 million yuan over 11 million yuan in the same period last year, an increase of 157818% year-on-year, mainly due to the increase of 346 million yuan in operating revenue in the current period over the same period last year, while the gross profit margin in the current period increased from 40.92% to 45.47%, an increase of 4.55 PCT, the gross profit in the current period increased by about 185 million yuan over the same period last year, and various expense rates of the company were properly controlled, As a result, the non net profit margin of the company increased by 17.80pct to 19.64% compared with the same period last year.
Non recurring profit and loss fluctuated greatly, resulting in negative growth of the company’s net profit attributable to the parent company in 2021q1. In 2022q1, the net profit attributable to the parent company was 117 million yuan, a decrease of 21 million yuan or about 14.94% compared with the same period of last year, mainly due to the decrease of 196 million yuan in the company’s non recurring income compared with the same period of last year. The main changes in non recurring profit and loss include: (1) the government subsidy income included in the current profit and loss in the current period was 04 million yuan, a decrease of about 165 million yuan compared with 169 million yuan in the same period of last year; (2) As the stock prices of Semiconductor Manufacturing International Corporation(688981) and Tianyue advanced held by the company decreased significantly in the current period, the company incurred a loss of 101 million yuan related to changes in fair value in the current period, while the company’s equity investment lost 24 million yuan in the same period of last year. This factor led to a decrease of about 77 million yuan in profit in the current period compared with the same period of last year.
There were sufficient orders on hand and the forward-looking indicators of revenue reached a new high. As of March 31, 2022, the company’s contractual liabilities had reached 1.5 billion, an increase of 9.28% over the beginning of the year and 227.46% year-on-year, a record high, which confirmed that the company had sufficient orders on hand. According to Gartner’s prediction, the market scale of etching equipment will increase from about US $12.3 billion in 2020 to about US $15.2 billion in 2024. According to yole’s prediction, the market scale of gallium nitride based MOCVD equipment will increase from US $190 million in 2020 to about US $250 million in 2025, and the market of power device epitaxial equipment will increase from about US $200 million in 2020 to about US $310 million in 2025. The company has successfully blocked several golden tracks, and its endogenous hematopoietic capacity has been continuously enhanced. It is expected to accelerate its growth in the future.
Investment suggestion: we estimate that the company’s revenue from 2022 to 2024 will be 4.303 billion yuan, 5.733 billion yuan and 7.291 billion yuan respectively, and the net profit attributable to the parent company will be 1.096 billion yuan, 1.385 billion yuan and 1.834 billion yuan respectively, maintaining the “Buy-A” investment rating.
Risk tip: the capital expenditure of downstream wafer factories is lower than expected, the intensification of industry competition and the deepening of Global trade frictions bring uncertainty to the whole semiconductor industry.
