\u3000\u3000 Hangzhou Chang Chuan Technology Co.Ltd(300604) (300604)
Event:
\u3000\u30001. The company issued the announcement on the advance increase of annual performance in 2021. It is estimated that the net profit attributable to the parent company in 2021 will be 180 million yuan to 230 million yuan, with a year-on-year increase of 112.12 to 171.04%; It is estimated that the net profit deducted from non parent company is 156 million yuan to 206 million yuan, with a year-on-year increase of 254.43% to 368.03%.
\u3000\u30002. The company issued a plan to issue shares to purchase assets and raise supporting funds and related party transactions. It plans to purchase 97.6687% equity of Changyi technology from Tiantang Sigu Hangshi, Lee Heng Lee and Jinggangshan Lecheng through issuing shares. After the completion of this transaction, the listed company will hold 100% equity of Changyi technology. According to the calculation of the tentative transaction price of all parties to the transaction, with reference to the issuance price of 40.27 yuan / share.
\u3000\u30003. The company issued the draft of restricted stock incentive plan. The total amount of restricted shares to be granted to incentive objects in this incentive plan is 5.2 million shares, accounting for 0.86% of the total share capital of the company at the time of announcement of this draft incentive plan, including 4.2 million restricted shares granted for the first time and 1 million shares reserved. In addition, the grant price of restricted shares is 25.17 yuan per share.
The industry boom is booming, and Q4 performance has increased significantly month on month: the company’s annual net profit attributable to the parent company has increased significantly year-on-year, mainly benefiting from the high prosperity of the integrated circuit industry and the strong demand of downstream customers for the company’s equipment. From the single quarter of Q4, the net profit attributable to the parent company was 50 million yuan to 100 million yuan, with a year-on-year increase of 2.04% to 104.08% and a month-on-month increase of 25.00% to 150.00%. The net profit deducted from non parent company was 44 million yuan to 94 million yuan, with a year-on-year increase of 10.00% to 135.00% and a month on month increase of 12.82% to 141.03%. Q4 performance continued the high growth trend, with a significant increase year on year and month on month.
The company plans to acquire Changyi technology with undervalued value, and further enrich the category of sorters: the company plans to purchase 97.6687% equity of Changyi technology through issuing shares. After estimation, the estimated value of 100% equity of Changyi technology is 280 million yuan. Changyi technology holds 100% equity of exis. Exis’s main business is to design and manufacture suitable test equipment and solutions for the test departments in the semiconductor and automation industry. Its core product is turret sorter. Its downstream customers include well-known semiconductor companies such as Broadcom, NXP semiconductor, MPs, Byd Company Limited(002594) semiconductors, Shanghai Awinic Technology Co.Ltd(688798) , as well as rimoonlight, united technology, Tongfu Microelectronics Co.Ltd(002156) Tianshui Huatian Technology Co.Ltd(002185) and other sealed test enterprises. Changyi technology had a revenue of 206 million yuan and a net profit of 47 million yuan in 2020, and a revenue of 249 million yuan and a net profit of 67 million yuan in the first three quarters of 2021. The valuation of this acquisition is low, corresponding to 1.36 times and 5.96 times of PS and PE in 2020 respectively. This acquisition will not only help listed companies to enrich product types and realize full product coverage of gravity sorter, translational sorter and turret sorter, but also improve the profitability and sustainable development ability of the company through the synergy between listed companies and exis in sales channels, R & D technology and so on.
After the comprehensive layout of the test equipment, SOC is expected to open up growth space: the company is a leading local supplier of semiconductor test equipment, with complete product lines, covering testing machines, sorting machines and probe platforms, and cut into the front wafer testing through the acquisition of STI. According to semi data, among the later testing machines, SOC, storage, analog and RF testing machines accounted for 58%, 22.5%, 15% and 4.5% respectively in 2020. China took the lead in making a breakthrough in analog testing machines, and the localization rate has reached a high level, but it is basically blank in SOC, storage and RF testing machines. The company has actively deployed SOC testing machines, and its products have been recognized by major customers in China. It is expected to open up new growth space in the future.
Equity incentive demonstrates confidence and deeply binds the core technical team: the company has issued a restricted stock incentive plan. The performance evaluation goal of this incentive plan is to take the operating income in 2021 as the base, with an increase of no less than 25%, 56% and 95% respectively from 2022 to 2024. It is estimated that the total amortization cost of restricted shares granted for the first time in this incentive plan is 109 million yuan, Among them, from 2022 to 2025, it is 58 million yuan, 34 million yuan, 16 million yuan and 01 million yuan respectively. The equity incentive scheme of the company has been implemented, covering 156 people, including core technicians, and deeply binding the interests of the company and core team members. In addition, the incentive plan also sets high performance evaluation objectives, which shows the confidence of the company’s management in the future development.
Investment suggestion: without considering the equity incentive and acquisition expectation, we expect the company’s revenue from 2021 to 2023 to be 1.475 billion yuan, 2.335 billion yuan and 3.162 billion yuan respectively, and the net profit attributable to the parent company to be 210 million yuan, 426 million yuan and 572 million yuan respectively, maintaining the “Buy-A” investment rating.
Risk tip: downstream demand attenuation risk, market competition risk, product R & D is less than expected, and customer expansion is less than expected.
