Event

The company released the 2024 annual results announcement, and the annual operating income was 9.065 billion yuan, a year-on-year increase of 44.73%; net profit attributable to the parent company was 1.616 billion yuan, down 9.53% year-on-year; net profit after deducting non-attributable to the parent company was 1.388 billion yuan, a year-on-year increase of 16.51%; Basic earnings per share was 2.61 yuan/share.

Rapid growth of equipment business, continuous increase in new product research and development

Benefiting from the continuous expansion of capital expenditure of domestic wafer fabs, the company's semiconductor equipment business has achieved rapid growth. In 2024, the company's gross profit margin and net profit margin will be 41.06% and 17.81% respectively, a year-on-year increase of -4.76pct and -10.67pct. In terms of expense ratio, the company's expense ratio during 2024 will be 25.28%, +0.30pct year-on-year; The sales expense rate, management expense rate, R&D expense rate, and financial expense rate were 5.28%, 5.31%, 15.64%, and -0.96%, respectively, and -2.57pct, -0.17pct, +2.60pct, and +0.44pct year-on-year.

LPCVD achieved the first sales, and thin film deposition quickly exceeded The

sales of etching equipment in 2024 will be about 7.277 billion yuan, a year-on-year increase of about 54.72%; MOCVD equipment sales were about 379 million yuan, a year-on-year decrease of about 18.03%; The first LPCVD equipment will be sold in 2024, and the annual equipment sales will be about 156 million yuan. In the past two years, the company has newly developed LPCVD film equipment and ALD film equipment, and a number of new equipment products have entered the market and obtained repeated orders. Among them, the cumulative shipment of LPCVD equipment has exceeded 150 reaction benches, and about 476 million yuan of bulk orders will be obtained in 2024, and more than 20 other conductor thin film deposition equipment will also enter the market one after another; The company's EPI equipment has successfully entered the stage of mass production verification of the client.

We expect the company's operating income from 2025 to 2027 to be 120.59/150.79/18.285 billion yuan, an increase of 33.02%/25.05%/21.26% year-on-year respectively; The net profit attributable to the parent company was 24.79/34.12/4.543 billion yuan, with a year-on-year growth rate of 53.45%/37.63%/33.14% and a 3-year CAGR of 41.14%; EPS was 3.98/5.48/7.30 yuan/share, and the corresponding PE was 48x/35x/26x.

In view of the fact that the company is a leading domestic etching equipment and the new business is expected to continue to grow at a high rate, it maintains an "overweight" rating.

Risk warning: the progress of wafer factory expansion is less than expected, and the progress of new product development and verification is less than expected