\u3000\u3000 Tianjin Zhonghuan Semiconductor Co.Ltd(002129) (002129)
Key investment points
Progress of employee stock ownership plan
The company repurchases shares of no less than 355 million yuan, which is intended to be used for employee stock ownership plan or equity incentive; Zhonghuan leading, a holding subsidiary, plans to increase capital and shares by 1.17 billion yuan for employee stock ownership incentive, reflecting the company's confidence and value recognition of future development prospects, further improving the company's long-term incentive mechanism, fully mobilizing the enthusiasm of the company's core backbone and excellent employees, and jointly promoting the long-term development of the company.
210 promote cost reduction and efficiency enhancement of the whole industrial chain, and significantly increase the technical barriers at the silicon end
The company takes the lead in 210 technology and cost. The production capacity of Inner Mongolia and Ningxia has been released one after another, and the total slice planning production capacity will exceed 105gw. It will continue to give full play to the competitive advantage of 210 silicon wafer, alleviate the situation that the industry has a short supply of high-quality production capacity, and further consolidate the company's leading position and market share in the photovoltaic silicon wafer market. The cost reduction and efficiency increase of the industrial chain brought by technological progress has become the main driving force to stimulate terminal demand. The technical difficulty brought by 210 has been greatly improved. The improvement of crystal drawing efficiency and slice yield requires deeper process accumulation and more intelligent production equipment, and the leading advantage is becoming stronger and stronger.
Semiconductor capacity planning is leading in China
The company is the leader of domestic semiconductor silicon wafers, and the demand for domestic substitution in the semiconductor industry chain is clear. At the end of 2021, the production capacity of 6 and below / 8 / 12 inches is 60000 / 70000 / 170000 pieces / month respectively, and it is expected to reach 90000 / 800000 / 400000 pieces / month respectively by the end of 2023. 12 inch products are in the period of increment and breakthrough, and there is a broad space in the future.
Profit forecast and valuation
The company is the double leader of photovoltaic and semiconductor silicon wafers. Due to the accelerated increase of 210 product scale, we raised our profit forecast. It is expected that the net profit attributable to the parent company in 2021-23 will be 3.85, 6.0 (54.3) and 8.0 (7.1) billion yuan respectively, with EPS of 1.19, 1.86 and 2.48 yuan / share respectively, corresponding to PE 35.0, 22.5 and 16.9 times, and given a "buy" rating.
Risk tips
The global PV installation is less than expected; The industrialization progress of 210 silicon wafer is less than expected; The expansion of semiconductor silicon wafer customers was less than expected.
