Core view
[market performance] last Friday, the CSI 300 index closed at 4726.7 points, down 2.0% in one week and 4.3% year to date; The Shanghai Composite Index closed at 3521.3, down 1.6% in one week and 3.3% year to date. Among CITIC’s 30 Tier-1 industries, the sectors of medicine, non-ferrous metals, power equipment and new energy performed better last week, of which the machinery industry decreased by 2.1%, ranking 21st. Since the beginning of the year, the machinery industry has decreased by 4.1%, ranking 20th. In terms of molecular industries, the top five performing industries in the machinery industry last week were instrumentation (+ 6.8%), lithium battery equipment (+ 1.4%), automation equipment (+ 0.4%), photovoltaic equipment (- 0.2%) and metal products (- 0.7%), with the largest decline being construction machinery (- 4.6%).
[key information] the global front-end wafer plant equipment expenditure is expected to increase by 10% year-on-year in 2022, reaching a record high of more than US $98 billion, marking the third consecutive year of growth. After 17% growth in 2020 and 39% growth in 2021, wafer plant equipment expenditure will continue to grow in 2022. The last consecutive three-year growth of the industry was from 2016 to 2018, and the last consecutive three-year growth was in the mid-1990s (semi).
[Key announcement] 1) Wuxi Shangji Automation Co.Ltd(603185) : the company expects to realize a net profit attributable to shareholders of listed companies of about 1.63 billion yuan to 1.8 billion yuan in 2021, with a year-on-year increase of 207.0% to 239.0%. 2) Zhejiang Jingsheng Mechanical & Electrical Co.Ltd(300316) : the company expects to realize a net profit attributable to shareholders of listed companies of about 1.58 billion yuan to 1.84 billion yuan in 2021, an increase of 720 million yuan to 980 million yuan compared with the same period of last year, an increase of 84.1% to 114.4% year-on-year.
[view this week] downstream chip demand is strong, semiconductor equipment sales are expected to continue to grow, and Chinese semiconductor equipment manufacturers will also benefit from domestic substitution. Benefiting from the rise of application fields such as data center, new energy vehicles, Internet of things and 5g, there is a strong demand for chips; Downstream enterprises represented by the world’s leading wafer foundry will reap a lot in 2021. The performance of TSMC, the leading foundry of wafers, reached a record high in 2021, with a revenue of about 366.4 billion yuan, a year-on-year increase of 18.5%, and a net profit attributable to the parent company of about 137.7 billion yuan, a year-on-year increase of 15.2%. The average predicted growth rate of the global semiconductor industry in 2021 and 2022 by several industrial research institutions is 24% and 12% respectively. In the face of the “core shortage” that has not been completely alleviated, the equipment investment in the global semiconductor industry is still expected to continue to grow in 2022. On December 14, 2021, semi released the year-end total semiconductor equipment forecast report, which predicted that the total global sales of semiconductor equipment in 2021 would reach a new high of US $103 billion, with a year-on-year increase of 44.7%; It is estimated that the global semiconductor equipment market will expand to USD 114 billion in 2022, with a year-on-year increase of 10.7%. Semiconductor equipment is the key to chip manufacturing, in which the value of manufacturing equipment such as wafer and mask (front channel equipment) accounts for more than 80%; The world’s leading semiconductor front channel equipment manufacturers are concentrated in the United States, Japan, the Netherlands and other countries; Amat, KLA and lam in the United States mainly control etching equipment, ion implanters, film deposition equipment, mask manufacturing equipment, testing equipment, etc; Tel, DNS and ADVANTEST in Japan mainly control lithography machine, etching equipment, single crystal wafer deposition equipment, wafer cleaning equipment, gluing machine / developer, etc; ASML in the Netherlands monopolizes the global high-end lithography market. China is the destination of the “third transfer” of the semiconductor industry, and the market scale has ranked first in the world, but there are many shortcomings in manufacturing capacity. Moreover, since May 2020, the U.S. Department of Commerce and other institutions have successively issued a series of increasingly stringent export restrictions on semiconductor equipment to China, and Chinese chip manufacturers may face the risk of supply interruption of key manufacturing equipment. In this context, the process of “de beautification” of semiconductor equipment in Chinese wafer factories may be accelerated, and local equipment enterprises are expected to usher in a period of development opportunities.
Due to the strong downstream demand and the superposition of technical iterations, the leading photovoltaic equipment plant will take the lead in benefiting. With the development of technology and the expansion of production scale, the cost of photovoltaic kwh is close to that of traditional fossil fuels. From 2010 to 2020, the global cost of photovoltaic kwh decreased by an average of about 84.2%. Photovoltaic will play an important role in energy low-carbon transformation under the driving factors such as cost reduction and policy support. According to the prediction of CPIA, the newly added PV installed capacity in the world will continue to grow, reaching 270 ~ 330gw in 2025, and the CAGR from 2020 to 2025 will be in the range of 15.7% ~ 20.5%. The competition pattern of photovoltaic industry chain is concentrated. According to CPIA, the output Cr5 of photovoltaic silicon wafer, photovoltaic cell wafer and photovoltaic module industry in 2020 is 88.1%, 53.2% and 55.1% respectively. The manufacturing equipment of photovoltaic raw materials and components has high technical barriers, high verification cost and long cycle, and the cooperative relationship between equipment suppliers and downstream manufacturers is stable. Leading equipment manufacturers with high-quality customer resources will take the lead in benefiting from the downstream capacity expansion cycle. In addition to the rapid expansion of photovoltaic power generation scale, the photovoltaic industry is facing technological transformation, which brings new opportunities for the development of photovoltaic equipment. Perc is the mainstream process of photovoltaic cells at present. According to CPIA, it will account for about 86% in 2020, but the photoelectric conversion efficiency is low. TOPCON and heterojunction battery are the development direction of industry technology; With the decrease of cost and the improvement of yield, according to CPIA prediction, the proportion of perc battery will drop to less than 50% in 2030. In addition, photovoltaic silicon wafer has the trend of larger single area and thinner thickness, which is conducive to reducing silicon consumption and silicon wafer cost; According to CPIA, 77.8% of silicon wafers will be 158.75 ~ 166mm in size in 2020, while 182 ~ 210mm silicon wafers will account for half by 2021, and the proportion will continue to increase in the future. The size of photovoltaic silicon wafer becomes larger, which makes the thermal field diameter of the original single crystal furnace equipment unable to meet the manufacturing requirements. It needs to be improved, upgraded or updated.
Investment advice
Semiconductor equipment sector: under the influence of strong demand in the semiconductor industry and domestic substitution factors, the income scale of local semiconductor equipment factories is expected to grow rapidly, and the benefit targets include Naura Technology Group Co.Ltd(002371) , Advanced Micro-Fabrication Equipment Inc.China(688012) , shengmei Shanghai, etc. Photovoltaic equipment sector: strong downstream demand and photovoltaic technology reform will open up space for equipment investment and upgrading. The beneficiary objects include Zhejiang Jingsheng Mechanical & Electrical Co.Ltd(300316) , Shenzhen S.C New Energy Technology Corporation(300724) , Suzhou Maxwell Technologies Co.Ltd(300751) , Wuxi Autowell Technology Co.Ltd(688516) , etc.
Risk tips
Semiconductor equipment sector: Sino US trade friction has intensified, the global epidemic has intensified, and the R & D of domestic equipment is less than expected. Photovoltaic equipment sector: the development of photovoltaic technology encountered a bottleneck, the installed capacity of photovoltaic was less than expected, and the capacity of photovoltaic equipment climbed less than expected
