On the evening of November 11th, Shengmei Shanghai (688082. SH) announced that the application for a private placement of 4.5 billion yuan was accepted by the Shanghai Stock Exchange. According to the Wind database, this plan is the largest expected to raise funds in China's semiconductor industry this year, and it is also the company's second financing after its IPO on the Science and Technology Innovation Board in November 2021.

The total amount of funds raised by the issuance of shares does not exceed 4.5 billion yuan (including this number), after deducting the issuance expenses, the net funds raised are intended to be invested in R&D and process testing platform construction projects, high-end semiconductor equipment iterative R&D projects, and supplementary working capital, with an investment of about 940 million yuan, 2.255 billion yuan and 1.3 billion yuan respectively.

The company intends to continuously expand its product line and implement the platform development of semiconductor equipment products. The "R&D and process testing platform construction project" is used to configure R&D testing instruments, lithography machines, CMP and other purchased equipment, combined with its own equipment, to set up equipment R&D and process testing platforms. The "high-end semiconductor equipment iterative R&D project" is used to purchase R&D equipment, allocate R&D personnel, and carry out further iterative development for the company's projects. In addition, 1.3 billion yuan of supplementary liquidity can be used to optimize the company's capital structure and alleviate the pressure on operating cash flow in the short and medium term.

Recently, Shengmei Shanghai announced its financial results for the third quarter of 2024. In the first three quarters, the company achieved operating income of 3.977 billion yuan, a year-on-year increase of 44.62%, net profit attributable to the parent company of 758 million yuan, a year-on-year increase of 12.72%, and non-net profit of 741 million yuan, a year-on-year increase of 15.84%. In the third quarter, the company's operating income was 1.573 billion yuan, a year-on-year increase of 37.96%, the net profit attributable to the parent company was 315 million yuan, a year-on-year increase of 35.09%, and the non-net profit was 306 million yuan, a year-on-year increase of 31.41%, and the single-quarter revenue and profit indicators achieved a growth rate of more than 30%. As of the third quarter, the company's total orders in hand amounted to 6.765 billion yuan, an increase of 3.66% over the same period last year.

The company also released its latest full-year performance forecast, with operating income forecasts ranging from 5.600 billion yuan to 5.880 billion yuan in 2024.

From the perspective of peer comparison, semiconductor equipment company AMEC (688012. SH) is also expanding its product matrix, implementing a platform-based strategy, and investing heavily in R&D. According to public information, Shengmei Shanghai maintains a leading position in the field of semiconductor cleaning equipment, while AMEC maintains a leading position in semiconductor etching equipment.

In the third quarter, AMEC's R&D investment increased by more than 95% year-on-year. The company's R&D investment in the third quarter was 1.544 billion yuan, a year-on-year increase of 95.99%, and the proportion of R&D investment in operating income was 28.03%, an increase of 8.54% over the same period last year. Zheshang Securities believes that the rapid growth of revenue in the first three quarters of this year is mainly driven by etching equipment, and the company's LPCVD (low-pressure chemical vapor phase equipment), MOCVD (metal organic compound chemical vapor deposition equipment), EPI equipment (semiconductor thin film equipment grown on substrates) have high-end products mass production or new product shipments.

NAURA (002371. SZ) has also laid out a variety of semiconductor manufacturing equipment, and is a company with a more comprehensive product line expansion in the industry, with the latest market value of nearly 260 billion yuan. In the third quarter, NAURA spent 2.191 billion yuan on R&D, a year-on-year increase of 57.82%. According to Huaxi Securities Research Report, the company's products cover etching equipment, thin film deposition equipment, vertical furnaces and cleaning equipment. Among them, the revenue of etching equipment and thin film deposition equipment in 2023 will be about 6 billion yuan, while the revenue of vertical furnace and cleaning equipment will exceed 3 billion yuan.

According to the calculation of Chengtong Securities, although the localization rate of semiconductor equipment has increased significantly in recent years, it is expected that the localization rate will still be about 20% in 2024, with a large space for domestic substitution. There is a large space for domestic substitution, and the difficulty of realizing it is not small, which is a huge challenge for Chinese semiconductor manufacturing equipment companies.