announcement: 2024Q1 operating income of 0.725 billion yuan, -9.74 YoY, net profit of -0.198 billion yuan, -288.69 YoY, non-return net profit -0.186 billion yuan. This quarter R & D investment increased by 25% year-on-year. 24Q1 revenue was in line with expectations and net profit was lower than expected, mainly due to lower revenue and higher fixed costs resulting in a gross margin of -7.7.

in 2023, the revenue of 200mm and below silicon wafers will be 1.45 billion yuan, with a gross profit margin of 17%. 300mm silicon wafer revenue is 1.38 billion yuan, with a gross profit margin of 10%; The income from entrusted processing services was 0.28 billion yuan, with a gross profit margin of 32%.

300mm silicon wafer sales in 2023 2.94 million pieces (yoy-3%). Subsidiary Shanghai Xinsheng 300mm semiconductor silicon wafer cumulative shipment of more than 10 million pieces, becoming the largest mass production of 300mm semiconductor silicon wafer positive products, and to achieve logic, storage, image sensor (CIS) and other applications of full coverage of semiconductor silicon wafer company. In 2023, the subsidiary Shanghai Xinsheng is implementing an additional 300000 pieces/month 300mm semiconductor silicon wafer production capacity construction project to achieve an additional 150000 pieces/month, 300mm semiconductor silicon wafer production capacity has reached 450000 pieces/month, and is expected to achieve 600000 pieces/month production capacity by the end of 2024; The total production capacity of subsidiary Xinao Technology and Okmetic polished wafers and epitaxial wafers of 200mm and below exceeds 500000 wafers/month; subsidiary Xinao Technology and Okmetic 200mm and below SOI silicon wafers have a combined production capacity of more than 65000 wafers/month.

200mm and below silicon wafer sales volume in 2023 3.52 million pieces (yoy-24%), subsidiary xinao technology, Okmetic, new silicon polymerization layout new products and new production capacity. Subsidiary Xinao Technology continued to push forward the 300mm high-end silicon-based material research and development pilot project, and completed the expansion of the 200mm SOI production line, increasing its production capacity from 30000 pieces/month to 40000 pieces/month. In terms of extension business, following the market situation with strong demand for electric vehicles and industrial products, Xinao Technology has carried out all-round cooperation with customers and actively explored the application market of IGBT/FRD products. At present, Xinao Technology has achieved a good market share.

subsidiary Finland Okmetic launched a 200mm characteristic silicon wafer expansion project in Vantaa, Finland, which will further expand the production capacity of 200mm polishing wafers for sensors and radio frequency applications, and consolidate its market position in high-end fields such as advanced sensors, power devices, radio frequency filters and integrated passive devices. Subsidiary New Silicon Polymerization completed the construction of the pilot line of piezoelectric film material substrate, some of the products have been verified by customers.

lowered its earnings forecast to an "overweight" rating. Due to the 2024 selling price adjustment and fixed cost increase, the 2024-25 net profit forecast was lowered from 4.1/0.62 billion yuan to 1.4/0.27 billion yuan, and the 2026 net profit forecast was added by 0.43 billion yuan. Shanghai silicon industry PS(TTM)11.2 times, comparable companies (Tianyue advanced, research silicon, Shanghai Hejing) average PS 12.7 times, up 14%, downgraded to "overweight" rating.

Risk Warning: The semiconductor business climate cycle is down, the yield is climbing less than expected, and the expansion of new overseas production capacity is less than expected.