\u3000\u3 Guocheng Mining Co.Ltd(000688) 037 Kingsemi Co.Ltd(688037) )
The company achieved a revenue of 184 million yuan in 22q1, a year-on-year increase of 62%; The net profit was 32 million yuan, a year-on-year increase of 398%; Deduct 31 million yuan, an increase of 580% year-on-year. The performance grew strongly and the profit in the first quarter exceeded expectations.
Key points supporting rating
Orders are in good condition and revenue growth is robust. The contract liabilities of 22q1 of the company were 434 million yuan, an increase of 23% over the end of 21; Meanwhile, the inventory amount was 1.082 billion yuan, an increase of 16% over the end of the year. In the current industrial environment of parts shortage and epidemic affecting parts delivery, inventories and contract liabilities continue to grow, and 22q1 revenue can maintain a year-on-year growth of 62%, indicating that the company is in good condition to obtain new orders. With the subsequent implementation of new production capacity, the growth of revenue is guaranteed.
Q1 profit increased significantly, mainly due to the increase of gross profit and the decrease of operating costs. The company’s 22q1 profit index was the highest quarterly level in recent three years, with a year-on-year increase in net profit of 398% and a year-on-year increase of 580%, which was higher than expected. 22q1 gross profit margin reached 38.75%, an increase of 2.86 percentage points over the same period last year. We believe that under the high prosperity of the industry, the company actively seizes the opportunity and continues to expand the production scale. Driven by the scale effect, the operating cost is stably controlled, superimposed with the rapid growth of revenue and the increase of product gross profit, which is the reason for the significant increase of the company’s profit.
The development of the front gluing will expand the growth space of the company. As a pioneer in the localization of previous gluing and developing equipment, the company has achieved mass sales of its offline, i-line has passed the verification of some customers and entered the stage of mass production and sales, KrF has also passed the acceptance of customers’ ATP and extended to advanced process products. The layout in the field of gluing and developing has been gradually improved and positive progress has been made. Under the incentive of international technological sovereignty competition, the growth space of the company in this field will be further expanded.
Profit forecast and rating
In view of the substantial improvement of the company’s profitability and good order status, it is predicted that the net profit in 22-24 years will be 140 / 217 / 293 million yuan, maintaining the buy rating.
Main risks of rating
The deterioration of the supply shortage of semiconductor parts, the impact of epidemic control on order delivery, the uncertainty of international geopolitical friction, and the risk of inventory impairment.
