\u3000\u3 Guocheng Mining Co.Ltd(000688) 126 National Silicon Industry Group Co.Ltd(688126) )
Event: the company released the first quarter report of 2022. In 2022q1, the company realized an operating revenue of 786 million yuan, a year-on-year increase of + 47.09%; The net profit attributable to the parent company was -151522 million yuan, a year-on-year increase of -267.19%; The non net profit deducted was -3.2805 million yuan, an increase of 423108 million yuan over the same period of last year.
Comments: in 2022q1, the company’s 300mm semiconductor silicon wafer revenue increased by + 122% year-on-year, deducting non net profit. The substantial growth of 2022q1 company’s revenue is mainly due to the significant increase in product sales with the release of the company’s production capacity. Among them, the revenue of 300mm semiconductor silicon wafer increased by 122% compared with the same period of last year. The expansion of revenue scale led to the significant growth of the company’s net profit deduction. The decline in net profit attributable to parent company in 2022q1 was mainly affected by changes in fair value. The decrease of net profit attributable to shareholders of the listed company in the current period compared with the same period of last year is mainly affected by the fluctuation of the fair value of the shares listed on Semiconductor Manufacturing International Corporation(688981) science and Innovation Board invested by the company through Juyuan Xinxing Industrial Fund and the change of non recurring profits and losses such as government subsidies recognized in the current period.
As a leading enterprise of semiconductor silicon wafers, under the high boom of the industry and the wave of domestic substitution, the company’s silicon wafers have core competitive advantages such as large-scale first mover advantage + production capacity led by China & rapid start-up + leading level of technological innovation National Silicon Industry Group Co.Ltd(688126) since its establishment, adhering to the major strategic needs of the national semiconductor industry, adhering to the global layout, closely following the international cutting-edge technology, the company has broken through a number of key core technologies in the field of semiconductor wafer manufacturing, breaking the situation that the localization rate of 300mm semiconductor wafer in China is almost 0%. The company’s 300mm production capacity is the first to achieve large-scale mass production in China, and the goal of 300000 pieces / month installed capacity by the end of 2021, At the same time, raised investment projects will help the rapid expansion of production capacity. The silicon wafer industry has entered a long business cycle in which supply exceeds demand, National Silicon Industry Group Co.Ltd(688126) with the advantage of large-scale first mover & rapid capacity start-up. When the supply of silicon wafer market is limited and new production capacity is not put into operation, the expansion of wafer foundry makes the consumption of silicon wafer rise sharply, which promotes the tide of silicon wafer price rise and realizes the simultaneous rise of volume and price. The semiconductor material industry belongs to the post manufacturing cycle. Silicon wafer enterprises greatly benefit from the dividends brought by the production capacity of wafer factories. Considering that the expansion cycle of foundry capacity is more than 6 months, the silicon wafer industry will continue to boom.
On the supply side, according to icmtia data and our calculation, the supply capacity of 300mm semiconductor silicon wafer in China is about 950000 pieces / month by the end of 2021 (including positive and test pieces), National Silicon Industry Group Co.Ltd(688126) accounting for about 32%. On the demand side, at the end of 2021, the monthly demand for 300mm silicon wafers in Chinese Mainland reached about 1.31 million Wafers / month, far exceeding the supply capacity of 950000 Wafers / month. In terms of the company’s production capacity, Shanghai Xinsheng 300mm silicon wafer will achieve the target of 300000 pieces / month installed capacity by the end of 2021, and the fixed increase project will be increased. After being put into operation, the 300mm production capacity is expected to double. In the future, the company plans to achieve the production capacity target of 1 million pieces per month. New energy vehicles set sail, and 200mm silicon wafer ushered in a golden opportunity again. The subsidiaries Xinao technology and okmetic continue to layout, with the production capacity of polished epitaxial wafers of 200mm and below exceeding 400000 Wafers / month, and the production capacity of SOI silicon wafers of 200mm and below exceeding 50000 Wafers / month.
Technology & products are comparable to the international advanced level, realizing the full coverage of process nodes + application fields + mainstream customers + product types, and helping to obtain a stable source of customers National Silicon Industry Group Co.Ltd(688126) has become one of the few semiconductor wafer enterprises with international competitiveness in China, and its products have been recognized by many customers at home and abroad National Silicon Industry Group Co.Ltd(688126) subsidiary Shanghai Xinsheng 300mm silicon wafer realizes three full coverage, namely, full coverage and large-scale sales of 14nm and above logic process and 3D storage process, full coverage of mainstream silicon wafer product types and full coverage of major customers in China. The other subsidiaries okmetic and Xinao technology cover 200mm polishing & epitaxial wafer and SOI silicon wafer, covering a full range of silicon wafer products. In terms of technology, the company continues to make deep breakthroughs, such as optimizing epitaxial products, eliminating edge MCLT rings, improving the device utilization of the whole wafer, and rapidly improving the effective length of near perfect single crystal.
Extend the existing business lines and invest in the field of advanced photomask. In 2021, as a limited partner, the company participated in the investment and establishment of Guangzhou xinruiguang equity investment fund partnership, with an investment of 400 million yuan. By the end of 2021, all the investment had been completed. The partnership is a project-based fund. As a limited partner, the company will invest all its capital in Guangzhou Xinrui photomask Technology Co., Ltd. in the form of equity investment. Guangzhou Xinrui photomask Technology Co., Ltd. was established on February 8, 2021. Its main business belongs to the category of “integrated circuit materials”. It builds an advanced photomask production line for processes of 40-28nm and above, so as to solve the problem that there is no local supplier of commercial advanced photomask in China.
Investment suggestion: Based on the company’s long-term growth momentum under the high demand of semiconductor silicon wafer industry and domestic substitution logic, we expect the net profit of 22 / 23 / 24 to be RMB 191 / 248 / 319 million respectively, maintain the target price of RMB 31.38/share and maintain the “buy” rating.
Risk tips: concentrated sales areas, rising labor costs, aggravation of the epidemic, loss of R & D technicians
