\u3000\u3000 Kingsemi Co.Ltd(688037) (688037)
On January 24, Kingsemi Co.Ltd(688037) released the announcement of performance pre increase. The company expects to realize an operating revenue of 810-840 million yuan in 2021, with a year-on-year increase of 146-155%; The net profit attributable to the parent company was 74-80 million yuan, with a year-on-year increase of 51-64%; The non net profit deducted was 60-68 million yuan, with a year-on-year increase of 366-424%.
The downstream boom continued to improve, and the revenue growth rate in 2021q4 exceeded expectations. The revenue in 2021 is expected to be 810-840 million yuan, corresponding to the Q4 revenue of 263-293 million yuan, with a year-on-year increase of 125-150% and a month on month increase of 36-52%, exceeding the market expectation. The high income growth is mainly due to the continuous improvement of the downstream prosperity of the equipment in the past 21 years, the smooth market expansion of the company and the significant growth of newly signed orders. In 2021, Q3 company’s inventory reached 850 million yuan, a year-on-year increase of 164%, contract liabilities reached 288 million yuan, a year-on-year increase of 364%, and the amount of orders on hand reached 1.331 billion yuan, a year-on-year increase of 73%. Among them, in the first three quarters of 21 years, the newly signed orders of the former equipment increased by 221.5% year-on-year, and the newly signed orders of the latter equipment increased by 217.5% year-on-year. While maintaining the steady growth of product revenue in the field of small size (such as LED, compound semiconductor, etc.) and advanced packaging in the back of integrated circuits, the company also achieved rapid and large-scale product revenue in the field of wafer processing in the front of integrated circuits.
Being in the core “track” of lithography, the scarcity of front gluing development is the target. According to Gartner data, in 2020, the global gluing and developing market will reach US $2.548 billion, accounting for 4% of the total equipment market of the wafer factory. Semi expects that the global equipment market sales will reach US $103 billion in 2021, with a year-on-year increase of 45%. We expect that the gluing and developing equipment market will also grow to US $3.7 billion in the same period. At the same time, the gluing and developing market presents a dominant competitive pattern. According to Gartner data, Tel in Japan accounted for 87% of the market share in 2020. At present, the company is the only supplier of front gluing and developing equipment with mass production products in China. Under this market pattern, the company will deeply benefit from the domestic substitution demand of Chinese downstream customers.
The IPO raised investment project will be put into operation soon, and the code relay expansion will be increased. According to the company’s announcement, some plants of the IPO raised investment project began to be put into use in December 21. In addition, the company also issued an additional issuance plan in June 2021. It is expected that the raised funds will not exceed 1 billion yuan and will be invested in the phase II project and Shanghai Lingang Holdings Co.Ltd(600848) project of Shenyang base. The port project will be mainly used for the R & D and production of high-end equipment such as ARF, immersion gluing developer and single-chip chemical cleaning machine, Shenyang phase II project will be mainly used for the production of front i-line, KrF, BARC gluing developer and rear advanced packaging gluing developer. With continuous investment, the company will rapidly increase its production capacity to meet the needs of the downstream market, and develop in depth to more high-end gluing and developing and single-chip chemical cleaning equipment, which is expected to achieve long-term high growth of business scale.
Investment suggestion: we expect the company’s revenue in 2021, 22 and 23 to be RMB 820 million, 13.50 million and 1.818 billion respectively, and the corresponding current price PS is 15 / 9 / 7 times respectively. Considering that the company is currently a scarce front coating and development supplier in China, the investment value is prominent, and the “recommended” rating is maintained.
Risk warning: product verification is not as expected; Cyclical fluctuations in downstream industries; Market competition intensifies.
