on September 7, 2023, tianyue advanced (688234) announced that the company would accept institutional research on September 6, 2023, shanghai Guoxin Investment and Development Co., Ltd., Harvest Global Investment Management, FIL, Gaoyi Asset Mgmt Co Ltd, Grand Alliance Asset Mgmt Ltd, Hillhouse, Invesco Europe, Ishana Capital Ltd, Marshall Wace North America, Panview, Pinpoint Inv Advisor Ltd, Goldman Sachs, Springs Capital (Hong Kong) Ltd, Teng Yue Allianz Partners, Matthews Management Partner, Lazard, Value Kadensa, Capital, Millennium Partners, Point72 Asset Management, Norges Bank Investment Management, ADIA (Abu Dhabi Investment Authority), Nippon Life Global Investors, Pleiad Investment Advisors, T. Rowe Price Associates, Guotai Asset Management, BNB Wealth Management, J.P. Morgan, Comgest SA, Lillergren Investments, Cathay Pacific Fund, AnglePoint Asset & Artisan, Pleiad Partners management participation.

The details are as follows:

Q: What is the expected capacity ramp in the second half of the year?

A: With the rapid growth of global and domestic demand for new energy vehicles, new energy power generation and energy storage, the industry's demand for silicon carbide substrates has shown a continuous strong trend. The silicon carbide semiconductor field will usher in long-term growth opportunities. Due to the high technical barriers in the preparation of silicon carbide semiconductor materials, only a few enterprises at home and abroad, including companies, have large-scale supply capacity. The company is working to ensure customer order delivery and new orders by accelerating capacity increases. In this context, the company accelerated the production capacity construction of the new plant in Shanghai, and gradually increased the production capacity of conductive substrates. In May 2023, the newly built Shanghai Lingang Smart Factory started product delivery and is currently in the stage of continuous output climbing. Famous domestic and foreign companies including Infineon, Bosch and other downstream power electronics and automotive electronics are cooperating with the company. According to the current orders in hand and the demand of cooperative customers, it is expected that the annual production capacity of 300000 conductive substrates in the first phase of the Lingang plant will be realized ahead of schedule, and the Shanghai Lingang plant will become the main production base of the company's conductive silicon carbide substrates. In addition, the company is planning to continue to further increase its production capacity through technological upgrading and increased capital investment. With the gradual release of the company's new Shanghai plant capacity, the company is expected to gain greater market influence in the field of silicon carbide semiconductors.

Q: What is the price trend of the company's silicon carbide products?

A: According to the YOLE report, substrate prices are on a downward trend in the long run. However, in the short term, the market is still in short supply, the effective supply of substrates is insufficient, and the price side is still in a relatively stable state.

Q: How is the company's order fulfillment with customer E and customer F?

A: Silicon carbide substrate has the characteristics of long preparation cycle, high technical barriers, slow pace of production expansion, low effective production capacity, etc., with the ability to supply customers in batches, is an effective indicator of the company's technical strength and industrialization capacity. In July last year, the company announced that it had signed a long-term sales framework agreement of 1.393 billion yuan with customer E. According to the contract, the company and its subsidiary Shanghai Tianyue sold conductive silicon carbide substrate products to customers. In August this year, the company announced that it had signed a long-term framework contract with customer F for conductive substrates. The contract amount exceeded 0.8 billion yuan, of which the advance payment was 0.1 billion yuan, highlighting the best-selling degree of the company's products. At present, our cooperation with the two customers is very smooth, the signed orders are in accordance with the agreement, the performance is good.

Q: How does the company attract and develop talents and ensure that they are not lost?

A: Continuously attracting high-quality talent is the company's established policy. With the continuous expansion of the company's business scale, on the one hand, the company strengthens the construction of the talent team of production management, continuously improves production efficiency, optimizes the production process, and cultivates a group of talents with modern production management skills. On the other hand, adhering to the concept of leading technology, company platform and customer globalization, the company continues to strengthen the introduction and training of high-end production management personnel and technology research and development personnel. As of the end of June 2023, the company had 151 research and development personnel, an increase of 61 over the same period last year. Among them, there are 52 masters and doctors, accounting for 34.44 per cent of the total number of research and development personnel. Two experts who enjoy special allowances from the State Council. In the process of production and operation, the company continuously explores and cultivates more outstanding talents to further ensure the stable and healthy development of the R & D team.

Q: How do you view the increasingly fierce competition in the silicon carbide industry?

A: the development time of silicon carbide industry is much shorter than that of silicon industry. There are many enterprises that have entered and intend to enter in the market, which indicates that the market prospect is very good and there are opportunities. A problem that cannot be ignored is that the silicon carbide industry is an industry that requires a lot of technology accumulation, and it cannot be achieved overnight. Technology accumulation is a very important link. On the other hand, from research and development to engineering to industrialization is also a very difficult process. The requirements for quality consistency in the product iteration process are very high. These two aspects are relatively big challenges for new players in the industry. Similarly, internationally renowned semiconductor companies, including Infineon, ON Sammy, Bosch, etc., have increased their investment in the field of silicon carbide, reflecting the market's high enthusiasm and long-term growth of silicon carbide semiconductor materials. confidence.

From the company's point of view, we understand that the market demand is relatively large. The problem that needs to be solved urgently is the problem of insufficient supply. At present, the company's Shanghai Lingang plant is still in the stage of rapid capacity improvement. Thanks to the company's sufficient order demand and extensive domestic and foreign customer base, the production target of 300000 pieces in the first phase of the Lingang plant will be reached earlier than the original plan. It is expected that the company will gain greater market influence in the field of silicon carbide.

Q: Is there an overseas risk in the company's supply chain?

a: the company implements + B + C management mode for some key material supply chains, which is the first supplier of the material and the leading brand in the world. B is the second supplier, which is the leading international or domestic brand. C is an alternative supplier and a newly developed supplier in China. Through the above-mentioned methods, the company has formed a comprehensive layout of domestic and foreign suppliers to reduce the impact from the supplier side and trade policy changes.

Q: What share can silicon carbide account for in the power semiconductor field in the future?

Answer: With the rapid development of 5G, Internet of Things, new energy and other industries, the third-generation semiconductor materials represented by silicon carbide have entered a stage of rapid development, and the market prospects are broad. In particular, the semiconductor power device is the core of electric energy conversion, benefiting from the characteristics of silicon carbide material itself, the power solution provided by silicon carbide material and technology can improve the conversion efficiency of electric energy, reduce power loss, and have higher power density, and have outstanding advantages in high power, high voltage and other application scenarios. At present, the main manufacturers of power semiconductors at home and abroad compete to lay out the SiC industry chain. According to the YOLE report, the market share of silicon carbide in power semiconductors will increase steadily in the future, reaching about 25% of the market share by 2028, which is an emerging field with clear development prospects. At present, silicon carbide semiconductor materials in the industry a variety of application products and solutions level is not poor, in the industrial and consumer fields are also continuing to accelerate the penetration of applications, while driving the growth of demand for silicon carbide semiconductor substrate materials. At present, the company is accelerating the increase in production capacity and actively welcoming the rapid development of the silicon carbide semiconductor industry.

Q: What is the specific progress of the company's liquid crystal growth technology?

answer: the company is one of the earliest enterprises engaged in the industrialization of silicon carbide semiconductor materials in China, with leading technical advantages and industrialization ability. It is one of the few enterprises in the world that can independently master the core key technology of silicon carbide substrate preparation to achieve large-scale production, especially with outstanding industrialization experience.

The company earlier carried out the study of liquid crystal growth. At the 2023 Semicon Forum, Dr. Gao Chao, the company's chief technology officer, reported on the company's core technology and forward-looking research and development. 8-inch crystals with low defect density were prepared by liquid phase method, which is the first in the industry and represents the company's leading technical strength. The company has broken through many technical bottlenecks, including crystal growth solution design, crystal growth thermal field design, crystal growth interface control and so on. As one of the most comprehensive and internationalized silicon carbide substrate manufacturers in China, the company continues to increase research and development efforts, and conducts intensive experiments in core technology fields such as crystal growth and defect control, continuously breaking through technical bottlenecks and improving product yield, Accelerate product innovation, consolidate and enhance the company's leading position in the industry.

Q: What is the supply and demand situation of the silicon carbide semiconductor industry, and will there be a surplus situation?

a: according to IHS data, driven by the huge demand of the new energy automobile industry and the impact of the increase in efficiency and power consumption requirements in areas such as photovoltaic wind power and charging piles, the market size of silicon carbide power devices is expected to exceed us $10 billion by 2027, with a compound growth rate of nearly 40% from 2018 to 2027.

According to the YOLE report, the market share of silicon carbide in power semiconductors will steadily increase in the future, reaching a market share of about 25% by 2028, which is an emerging field with clear development prospects.

Because of its excellent physical properties, silicon carbide materials can exceed the physical limits of silicon materials, so they continue to deepen in downstream applications. In the long run, silicon carbide semiconductors are maintaining a high growth boom with the vigorous development of downstream electric vehicles, photovoltaic new energy, energy storage and other applications.Degree. Internationally renowned semiconductor companies, including Infineon, ON Sammy, Bosch, etc., have increased their investment in the field of silicon carbide. Silicon carbide technology and solutions are promoting the upgrading of power electronic devices, representing the sustainable development of global electrification and low-carbon in the future. direction.

Q: Is it possible that silicon carbide materials will be replaced by other materials in the future?

A: We believe that materials must continue to develop, and each generation of materials will have its own most suitable use value and the most suitable market. We also continue to pay attention to the future direction of material development, continue to increase investment in research and development, strengthen independent innovation, accelerate product iteration, improve product quality, and strive to become a leader in the international wide band gap semiconductor industry.

Tianyue Advanced (688234) main business: research and development, production and sales of silicon carbide substrates.

tianyue advanced 2023 report showed that the company's main revenue was 0.438 billion yuan, up 172.38 percent from the same period last year. Net profit attributable to parent -72.0557 million yuan, up 1.29 percent year-on-year; Deduct non-net profit -0.11 billion yuan, down 5.38 percent year-on-year; In the second quarter of 2023, the company's single-quarter main revenue was 0.245 billion yuan, up 162.9 percent from the same period last year. Single-quarter net profit -43.8996 million yuan, year-on-year decrease of 50.17; Single-quarter non-net profit -64.8365 million yuan, down 18.27 year-on-year; Debt ratio 10.48, investment income 13.7969 million yuan, financial expenses -7.0366 million yuan, gross profit margin 11.3.

The stock has been rated by 6 institutions in the last 90 days, with 3 buy ratings and 3 overweight ratings; the average institutional target price in the past 90 days is 89.64.

The following is detailed earnings forecast information:

The margin trading data shows that the net inflow of financing of the stock has 22.2364 million in the past three months, and the financing balance has increased; the net inflow of securities has 0.117 billion, and the balance of securities has increased.

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