ping an securities co., ltd. Xu Yong, fu Qiang, Guo guanjun and Chen fudong recently conducted research on tuojing technology and released the research report "domestic semiconductor thin film deposition equipment leader, in a rapid growth period". this report gives tuojing technology an overweight rating, and the current stock price is 237.56 yuan.

Tuojing Technology (688072)

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Domestic thin film deposition equipment tap, is currently in a rapid growth period. Founded in 2010, the company focuses on the research and development, production, sales and technical services of semiconductor thin film deposition equipment. Its main products include PECVD, ALD and SACVD. It will be listed on the board in April 2022. In terms of performance, from 2018 to 2022, the company's revenue increased from 0.071 billion yuan to 1.706 billion yuan, with a CAGR of 121.67. In the first three quarters of 2023, the company's revenue was 1.703 billion yuan, up 71.71 year-on-year, with a relatively rapid growth momentum. In addition, from 2020 to 2022, the company's contract liabilities increased from 0.134 billion yuan to 1.397 billion yuan, with a CAGR of 222.53. In the first three quarters of 2023, the company's contract liabilities were 1.497 billion yuan, year-on-year growth of 62.29, the company's rapid growth in contractual liabilities to some extent reflects the company's more abundant orders, the future performance of the continued growth of strong certainty.

thin film deposition equipment market pattern is superior, domestic substitution space is broad. At present, the pace of domestic fab expansion is fast, the upstream film deposition equipment has brought strong market demand, and the current overseas sanctions on China's semiconductor equipment is still continuing, domestic substitution main line hot. From the perspective of market structure, the thin film deposition equipment market is mainly occupied by overseas manufacturers such as AMAT, TEL and ASM, with strong monopoly and low localization rate. Domestic manufacturers face a large replaceable market space. At present, most of the domestic thin film deposition equipment manufacturers are in the initial stage and have a small volume. Driven by the trend of localization substitution, the growth potential will gradually appear.

the company's film deposition equipment card position advantage is obvious, the platform layout of the prototype has emerged. At present, the company has a relatively rich product series such as PECVD, SACVD, ALD, HDPCVD, bonding equipment, etc. Some products have been adapted to domestic 28/14nm logic chips, 19/17nm DRAM chips and 64/128 layer 3D NAND FLASH wafer manufacturing lines, and have successfully realized industrial application or verification. PECVD is the core product of the company. The company has started to develop PECVD equipment since its establishment. After more than ten years of research and development and industrialization experience, the company has now realized the coverage of a full range of PECVD thin film materials, with obvious card position advantages. Based on this, the company has gradually expanded the thin film deposition equipment to SACVD, ALD, HDPCVD and other equipment fields, further enriching the combination of thin film deposition equipment, at present, some of the product models in the three devices have been industrialized, in addition, the company focuses on the trend of three-dimensional integration of chips, focusing on hybrid bonding equipment, its wafer-to-wafer bonding products have also been industrialized. The company in the field of film deposition equipment to build a relatively rich product portfolio, and actively expand the bonding equipment, platform layout of the initial emergence.

investment suggestion: the company is a leading enterprise of domestic thin film deposition equipment. on the basis of PECVD core products, the company has widely distributed SACVD, ALD, HDPCVD, bonding equipment and other fields. it has strong scarcity in the domestic thin film deposition equipment track and obvious card position advantage. At present, the expansion pace of domestic wafer factories is fast, driving the upstream equipment market to continue to prosper, and the company has strong certainty of long-term performance. We expect the EPS of the company from 2023 to 2025 to be 2.66 yuan, 4.16 yuan and 5.86 yuan respectively, and PE corresponding to the closing price on November 20, 2023 to be 91.2X, 58.4X and 41.4X respectively. The company's products have excellent performance, high quality downstream customers, friendly external market environment and great growth potential. We are optimistic about the company's future development, covering for the first time and giving it a "recommend" rating.

risk tips: 1, technological innovation and new product development risk. Semiconductor technology is changing with each passing day, and new market demands are emerging one after another. If the company's product iteration speed cannot meet the new equipment needs brought about by technological progress, it may adversely affect the company's performance growth. 2, downstream demand is less than expected risk. The company's products are mainly used in the semiconductor industry, if the domestic fab expansion pace slows down, will directly affect the company's performance. 3, market competition risk. Domestic semiconductor equipment manufacturers may enter each other's business fields and develop similar products, the company may face double competition from international giants and potential domestic new entrants, if the company is unable to effectively cope with the market competition environment, may adversely affect the company's performance.

the securities star data center calculated according to the research report data released in the past three years that the research team of Yan fan of China merchants securities has conducted in-depth research on the stock. the average forecast accuracy in the past three years is as high as 87.2. its forecast attributable net profit in 2023 is profit 0.504 billion, and the forecast PE converted according to the current price is 90.14.

The latest profit forecast is as follows:

The stock has been rated by 26 institutions in the last 90 days, with 18 buying ratings and 8 overweight ratings; the average institutional target price for the past 90 days is 315.51.

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