the performance in 2023 increased significantly, CMP equipment shipments increased significantly, and the new model progressed smoothly. huahai qingke 2023 achieved a revenue of 2.508 billion yuan (+52.11 yoy) and a net profit of 0.724 billion yuan (+44.29 yoy) for the whole year, mainly due to the increase in the market share of CMP products, the acquisition of batch orders for wafer regeneration and other businesses, and the gradual increase in the volume of key consumables and maintenance services. The company's gross margin in 2023 was 46.02, yoy -1.70pcts. 1Q24 revenue of 0.68 billion yuan (-10.40%yoy), home-to-home net profit of 0.202 billion yuan (-4.27%yoy), gross margin of 47.92, yoy 1.27pcts. We are optimistic about the company's new opportunities in the field of integrated circuits such as CMP equipment, thinning equipment, scribing equipment, wet equipment, measuring equipment, wafer regeneration, consumables services, etc. We expect the company's 24/25/26 annual income to be 33.3/44.8/5.85 billion yuan, the average PS value of the industry in 2024 to be 9.2 times, the company gradually releases new products, giving a certain valuation premium, corresponding to 10.5x 24PS, maintaining "buy" and the target price of 219.87 yuan.

2023 review: CMP equipment revenue increased significantly, with thinning, cutting and cleaning equipment progressing smoothly. In 2023, the company's CMP equipment revenue was 2.278 billion yuan, accounting for 90.82, up 59.20 from the same period of last year and gross profit margin of 46.02. Revenue from wafer regeneration, key consumables and maintenance services was 0.23 billion yuan, accounting for 9.18, up 5.55 from the same period of last year and gross profit margin of 45.98. The company's gross margin for 2023 was 46.02 percent, down 1.70pct year-on-year. The company launched the Versatile-GP300 mass production machine has taken a number of head enterprises batch orders, 12-inch wafer thinning film all-in-one machine has obtained the packaging test leader Demo order, the company's development of dry-throw packaging thinning machine is expected to be verified in the first half of 2024. 12-inch wafer edge cutting equipment, 12-inch single-chip terminal cleaning machine, brush cleaning equipment for 4/6/8-inch compound semiconductor, and 4/6/8/12-inch cartridge cleaning equipment have been sent to the client for verification.

1Q24 & 24 outlook: revenue is expected to continue to grow. "equipment + service" builds moat huahai qingke 1Q24 revenue is 0.68 billion yuan (+10.40%yoy), net profit attributable to parent is 0.202 billion yuan (+4.27%yoy), gross profit margin is 47.92, +1.27pcts year on year. 1Q24 Company invested 0.08 billion yuan in research and development, up 24.26 YoY. The company launched the Universal H300 machine, has completed the multi-channel process of small batch verification, is expected to achieve mass production in 2024. Universal-150Smart for customers such as third-generation semiconductors have been shipped in small quantities, while new models are being actively developed and are expected to be sent to customers for verification in 2024. SEMI expects semiconductor manufacturing equipment to resume growth in 2024, and is optimistic about the company's growth in 24 years of active downstream expansion and increased localization of semiconductor equipment.

valuation: maintain the "buy" rating and adjust the target price to 219.87 yuan. considering the long revenue recognition time for new products, we adjusted the company's 24-25 revenue forecast to 33.3/4.48 billion yuan (previous value: 37.7/4.61 billion yuan). In 2024, the industry PS average value is 9.2 times, the company's new products gradually release, we give a certain valuation premium, corresponding to 10.5x 24PS, maintain "buy", adjust the target price to 219.87 yuan (previous value: 237.21 yuan).

risk warning: the global semiconductor downward cycle, semiconductor equipment demand is less than expected, industry competition intensified.