\u3000\u30 Guangdong Tengen Industrial Group Co.Ltd(003003) 16 Zhejiang Jingsheng Mechanical & Electrical Co.Ltd(300316) )
Core view
In 2021, the revenue increased by 56.44% year-on-year, and the net profit attributable to the parent company increased by 99.46% year-on-year. The company achieved a revenue of 5.961 billion yuan in 2021, with a year-on-year increase of 56.44%; The net profit attributable to the parent company was 1.712 billion yuan, with a year-on-year increase of 99.46%. The performance growth was mainly due to the continuous high boom of photovoltaic, semiconductor, led and consumer electronics industries and strong downstream demand. In 2021, the gross profit margin / net profit margin was 39.73% / 28.99%, with a year-on-year change of + 3.12 / + 6.64 PCTs. Benefiting from the scale effect, the profitability of the company continued to improve. In 2021, the company’s sales / management / R & D / financial expense ratio was 0.51% / 3.35% / 5.93% / – 0.23%, with a year-on-year change of -0.35 / – 0.22 / – 0.03 / – 0.12 PCT, and the company’s expenses were well controlled during the period. The net operating cash flow of the company was 1.737 billion yuan, a year-on-year increase of 82.00%. In 2022q1, the revenue was 1.952 billion yuan, a year-on-year increase of 114.03%; The net profit attributable to the parent company was 442 million yuan, a year-on-year increase of 57.13%. The company’s business goal in 2022 is that the revenue scale will exceed 10 billion yuan, and the newly signed semiconductor equipment and service orders will exceed 3 billion yuan (including tax). The company achieved high growth in both fields of Pan semiconductor equipment and materials. The company is the leader of Pan semiconductor equipment and actively expands to the field of Pan semiconductor materials. Its products include crystal growth / processing equipment, wafer processing equipment, sapphire ingot and wafer, covering the fields of photovoltaic, semiconductor, silicon carbide and sapphire. In terms of business, the revenue of crystal growth equipment / intelligent processing equipment / sapphire materials / equipment transformation services was 34.75/11.39/3.89/362 million yuan respectively, with a year-on-year change of + 32.47% / + 106.61% / + 100.78% / 258.20%. The growth of the company’s main business of crystal growth equipment is mainly due to the high prosperity of photovoltaic industry + technology iteration, strong demand of semiconductor industry + acceleration of domestic substitution. In addition, the company has made breakthroughs in the business of sapphire and silicon carbide materials, and the revenue of sapphire materials has increased significantly. At present, the company has successfully grown 700kg sapphire crystals and achieved large-scale production of 300kg and above.
In terms of silicon carbide materials, the company has built a 6-inch silicon carbide crystal growth, slicing and polishing R & D experimental line, and the products have been verified by some customers. At present, the company has formed a purchase intention with customer a, and will provide it with a total of no less than 230000 silicon carbide substrates from 2022 to 2025.
Sufficient orders on hand to ensure the company’s future performance growth. By the end of 2021, the contract liabilities / inventories of the company were RMB 4.964 billion / 6.051 billion respectively, with a year-on-year increase of 147.75% / 134.50%, indicating a significant increase in new orders signed by the company in 2021. As of 2022q1, the company’s contract liabilities / inventories were 5.561/8.124 billion yuan respectively, and the outstanding equipment contracts were 22.237 billion yuan (including tax, and the outstanding semiconductor equipment contracts were 1.343 billion yuan). The company has sufficient orders on hand and high certainty of future performance.
Risk warning: new business expansion is not as expected; The downstream expansion of photovoltaic production is less than expected; Industry competition intensifies. Investment suggestion: the company is the leader of Pan semiconductor equipment and actively expands to the field of materials. It is expected to become a “equipment + material” platform company in the future. The company has sufficient orders and high certainty of future performance. We expect the net profit attributable to the parent company in 202224 to be RMB 2.608/3.519/4.33 billion, corresponding to pe23 / 17 / 14 times, maintaining the “buy” rating.
