\u3000\u3 Guocheng Mining Co.Ltd(000688) 001 Suzhou Hyc Technology Co.Ltd(688001) )
Event: on April 28, 2022, the company released the first quarterly report of 2022: the operating revenue of the company in 2022q1 was 373 million yuan, with a year-on-year increase of 32.14% in a single quarter; The net profit attributable to the parent company was 41 million yuan, with a year-on-year increase of 44.92% in a single quarter; The net profit deducted from non parent company was 27 million yuan, with a year-on-year increase of 12.24% in a single quarter; The gross profit margin was 57.47%, with a year-on-year increase of 4.14 PCTs in a single quarter; The net interest rate was 10.95%, with a year-on-year increase of 0.96 PCTs in a single quarter. On April 15, 2022, the company released its annual report for 2021: the company’s operating revenue in 2021 was 2.02 billion yuan, a year-on-year increase of 20.43%; The net profit attributable to the parent company was 314 million yuan, a year-on-year increase of 18.43%; The net profit deducted from non parent company was 288 million yuan, with a year-on-year increase of 32.15%; The gross profit margin was 53.04%, with a year-on-year increase of 4.99pcts; The net interest rate was 15.54%, a year-on-year decrease of 0.26pcts.
Comments:
The company’s revenue grew rapidly. In 2021, the revenue of semiconductor testing equipment business accounted for 20.66%, and the share is expected to continue to increase. The company achieved an operating revenue of 373 million yuan in 2022q1, with a year-on-year increase of 32%. In 2021, the company achieved an operating revenue of 2.02 billion yuan, with a year-on-year increase of 20.43%. In terms of products in 2021, the business of consumer electronic testing and automation equipment achieved an operating revenue of 1.494 billion yuan, a year-on-year increase of 83.62%, accounting for 73.94% of the total revenue; The semiconductor testing equipment manufacturing business achieved an operating revenue of 417 million yuan, a year-on-year increase of 36.45%, accounting for 20.66% of the total revenue. In the future, with the continuous development of the company in the semiconductor testing industry, the share is expected to continue to increase.
Apple is the company’s main end customer. In 2013, relying on its own product quality and R & D strength, the company successfully became a qualified supplier of apple, and the cooperative relationship continues to this day. During this period, I participated in the inspection of the upgrading of LCD modules of mobile terminals. Through the active intervention in the early stage of product development, the company can also help it shorten the R & D time of corresponding modules by relying on its own strength. Due to the cooperation, the company has maintained the same technical architecture and has been continuously upgraded and optimized in previous polishing. Up to now, the company’s testing solutions have been used for the testing of Apple’s mobile phones, tablets, watches, headphones and other main products. The testing process node has covered the testing of the whole machine, system, module and sip system level chip. After years of stable cooperation, relying on its own R & D capabilities, the company has established stable trust barriers with major end customers.
The company is the leader of cell/module process detection equipment in AMOLED industry in Chinese Mainland. In the future, new micro display technologies such as mini/micro led and micro OLED will bring broad market prospects. According to cinnorresearch data, in 2020, the global share of TFT-LCD capacity in Chinese Mainland will reach 55%, exceeding half of the capacity for the first time, while AMOLED capacity is expected to reach 52% of the global capacity in 2024. After decades of development, China has become the manufacturing center of the global new display industry.
The market scale of testing equipment in Chinese Mainland in 2021 is about 5.9 billion yuan, of which the cell/module optical testing equipment is about 2.1 billion yuan, accounting for 36%. As many TFT-LCD and AMOLED factories enter the construction period in 2022, the new construction and expansion of production will drive the market scale of new display industry testing equipment in Chinese Mainland to reach 9.2 billion yuan in 2024, of which the market scale of cell/module process optical testing equipment will also reach 2.6 billion yuan in 2024. Among the cell / module process inspection equipment, automatic optical inspection equipment is based on the optical principle to detect and analyze product defects, ensure and improve product yield and quality, mainly including image quality inspection equipment, de mura equipment, OTP equipment, etc. it is the main composition of cell / module process inspection equipment in AMOLED industry, accounting for more than 60% of the investment in cell / module process inspection equipment.
In 2021, Suzhou Hyc Technology Co.Ltd(688001) becomes the AMOLED industry in Chinese Mainland with 32% of the market sales
No.1 of cell / module process testing equipment manufacturer. . With more superior display performance, new micro display technologies such as micro led and micro OLED have been tried to be applied in various emerging display devices. For example, micro OLED technology has been applied to VR / AR head display devices. According to IDC’s prediction, the global volume of VR / VR head display will exceed 10 million units in 2021, and the volume of shipment is expected to exceed 40 million units in 2024, with a compound annual growth rate of 53.77%. Therefore, benefiting from the demand pull of emerging consumer electronics products, new micro display technologies such as mini / micro led and micro OLED will have broad market prospects in the future, and will also drive the demand growth of supporting flat panel display and testing equipment in the future. The company’s flat panel detection field covers a number of core technical indicators of flat panel displays, such as display, touch, optics, signal and so on. The company has successfully developed testing equipment and supporting products for OLED flat panel displays, which have been recognized by international well-known companies, and achieved the coverage of mainstream flat panel displays LCD and OLED testing. The mura compensation technology of flexible OLED subsequently developed helps China’s largest flat panel display manufacturer successfully realize mass production and import, and helps it become the first mass production manufacturer of flexible OLED panel in China after Samsung. The mura compensation equipment of flexible OLED continues to maintain the first cumulative installed capacity in China. The company has established long-term and stable cooperative relations with international well-known flat panel manufacturers such as Samsung, sharp, LG, BOE and JDI, and formed strong cooperation stickiness with major panel manufacturers. The company closely followed the iteration of panel display technology, comprehensively improved the flat-panel display detection technology to OLED screen, and continuously upgraded the reserves of new generation display detection technology such as miniled, micro led and micro OLED. Among them, micro OLED series detection equipment obtained the first test line order of end customers during the reporting period, maintaining the leading level in the industry in terms of technology and market.
Wearable electronic products such as smart watches and wireless headphones are innovative consumer electronic products. They not only meet the accessory properties of traditional watches and headphones, but also realize some smart terminal functions of smart phones. Since Apple released the first generation of applewatch, Apple has released a number of smart watches and wireless headphones. Its continuous iterative and innovative product line leads the innovation direction of wearable products. Apple has established a strict supplier selection system. After years of cooperation, its subsidiary olitone has successfully entered its supplier system and continued to supply testing and assembly equipment for wearable electronic products.
In the future, the company will continue to arrange the assembly and testing business of consumer electronics such as smart watches and wireless earphones, maintain good cooperative relations with apple, Foxconn, Tencent group, Guangda, Goethe group and other manufacturers, and actively expand new high-quality customer groups. In 2021, the subsidiary oulitong achieved an operating revenue of 365 million yuan, a year-on-year increase of about 20%, and a net profit attributable to the parent company of 143 million yuan, a year-on-year increase of 3.3%.
The company continues to promote semiconductor testing business and is expected to fully benefit from the development opportunities brought by domestic substitution. According to the data released by semi, in 2021, the global semiconductor equipment sales exceeded US $100 billion for the first time, reaching US $103 billion, and the test equipment is expected to exceed US $8.24 billion, accounting for 8%, of which SOC tester, as the type of tester with the largest proportion, reached 50%, about US $4.12 billion. At present, the global IC testing equipment is still monopolized by a few powerful overseas giant companies in the field of high-tech threshold testing equipment such as SOC testing machine, memory chip testing machine and RF testing machine. The competition pattern is relatively scattered in the field of medium and low-end testing machines such as discrete device testing machine, analog testing machine and low-end digital testing machine. As Chinese Mainland has increased its investment in the integrated circuit industry and more and more Chinese chip design enterprises have successively developed high-end SOC chips, the localization rate of the semiconductor test equipment market in Chinese Mainland will maintain a steady increase in the next 10 years.
The semiconductor test equipment industry mainly focuses on standard equipment, supplemented by non-standard equipment. At present, the company’s development strategy of non-standard semiconductor test equipment mainly aims at large orders of large customers and provides cost-effective test solutions for global benchmark customers; The development strategy of standard semiconductor equipment is first positioned in the three fields monopolized by overseas manufacturers, such as SOC tester, RF special tester and sip and other advanced system packaging module tester. It aims at the world’s best-selling models and implements the strategy of parameter and function benchmarking and compatibility.
The company is one of the few enterprises in the world that can independently develop ate architecture SOC tester and pxie architecture RF and system module tester at the same time. The technical parameters of the self-developed second-generation SOC tester T7600 series have reached the parameter level of the mid-range SOC tester recognized in the industry, and mass production has been realized in chip testing such as fingerprint, image sensing, MCU and TOF. The self-developed pxie architecture tester not only has strong competitiveness in the field of SIP chip system level packaging, Its RF detection system has strong market competitiveness in core performance indicators and high cost performance advantages. At present, SOC testers in the market are divided into high, medium and low-grade SOC testers according to their main performance. The highest configuration version of T7600 has reached the level of medium-grade SOC tester.
Another testing machine platform developed by the company is based on pxie architecture testing machine and supporting four-layer translational 128 station SLT sorter ep3000. The testing solution has been recognized by SIP (advanced packaging) manufacturers such as Goethe electronics, and has entered the stage of large-scale procurement, serving the world’s top consumer electronics manufacturers in the United States. At present, the company is also the only manufacturer in China that can provide the overall solution of sip128 station high parallel test machine plus separator. All kinds of SIP advanced packaging modules and micro OLED are indispensable core components of VR / Ar / MR in the future. The flat panel display business unit and semiconductor business unit of the company were recognized by industry leaders in 2021 and completed the acceptance of SIP and micro OLED mass production or small batch mass production orders.
Through continuous technological upgrading, the company maintains its technical advantages in the field of customized mobile terminal BMS chip test equipment, stabilizes the business of customized semiconductor test equipment for large customers, and actively promotes the market development of standard equipment. After efforts in 2021, the company has developed SOC chip tester, RF special tester, SIP advanced packaging system tester, SLT (system) translation sorter The five standard equipment fields of wafer defect detection equipment have successfully realized the batch orders of new products and new customers. New customers in 2021, including Will Semiconductor Co.Ltd.Shanghai(603501) , Jiasheng semiconductor, safety test semiconductor and Guangdong Yuexin, have laid a good customer foundation for the test of SOC tester, RF tester and advanced packaging system in 2022 to realize the installed capacity of 100 sets as soon as possible.
The company has actively arranged the testing business of new energy vehicles, with orders increasing year by year and ushering in a period of rapid development. The new energy vehicle test system involves many links such as R & D, manufacturing and post market. The test items include performance test, durability test, environmental simulation test, offline test and so on. As an important part of product manufacturing, new energy vehicle test station can be used to test and analyze various functions and performance in the production process of key product modules of new energy vehicles. Therefore, new energy vehicle test equipment plays an increasingly important role in the production process of new energy vehicles. The rapid development of new energy vehicles will also drive the rapid growth of the test equipment market.
In terms of market expansion of the new energy vehicle industry, on the one hand, relying on the advantages of its branches in the United States, the company has become the supplier of the largest electric vehicle manufacturer in the United States for many years, with stable cooperative relations and increasing orders year by year. On the other hand, the company saw the rise of new forces in China’s car making, established a Chinese sales team in 2021, actively explored relevant high-quality customers in China, and was recognized by relevant customers at the end of the period. The company has not only developed on-board computer testing machine, body controller testing platform and various electronic product module burning and communication testing related equipment for head customers of new energy vehicles, but also actively arranged in the field of ADAS sensors and developed production and testing related equipment for lidar, high-voltage relay, acceleration sensor, camera module and navigation module, which has won the trust and praise of customers. In the field of power battery testing, the company actively participates in the technology and market development of battery module and battery pack section testing related equipment through direct and indirect ways, and has implemented relevant requirements. The company actively arranges the business of assembly and testing line of core product modules of new energy vehicles, and provides customers with overall solutions for process assembly and testing of the whole line. At present, it mainly focuses on the business fields related to electric drive and ADAS. The company continuously optimizes the performance and technical iteration in the field of traditional FCT / EOL equipment, reduces the equipment cost, shortens the equipment delivery time and optimizes the debugging time by means of modularization of hardware platform and standardization of software design, and improves the core competitiveness in this field.
Profit forecast, valuation and rating: the company is a leading supplier of tablet and intelligent wearable detection devices in China. Considering the slowdown of the growth rate of the tablet industry in the future, we lowered the company’s net profit attributable to the parent company from 2022 to 2023 to 426 million yuan (down 5.66%) and 536 million yuan (down 5.45%), and it is expected that the net profit attributable to the parent company in 2024 will be 666 million yuan, We continue to be optimistic about the performance increment brought by the company’s layout in the field of semiconductor and new energy vehicle testing equipment, and maintain the “buy” rating.
Risk tip: the risk of intensified market competition, the risk of less than expected new market development and higher customer concentration.
