Event Overview

The company announced its 2024 annual results.

In 2024, the company is expected to achieve revenue of 3.35-3.75 billion yuan, a year-on-year increase of +33.57%-+49.52%, which is basically in line with market expectations, of which Q4 is 898-1.298 billion yuan, a year-on-year increase of +34.56%-+94.46%, and the central value is 1.098 billion yuan, a year-on-year increase of +64.51%. We believe that the main reasons are: 1) CMP equipment has sufficient orders in hand to accelerate the recognition of revenue, and we infer that CMP is still the main component of revenue; 2) The market development of new product thinning, cleaning, wafer regeneration, CDS and SDS equipment has been smoothly developed and gradually increased. In terms of new orders, the company's core CMP equipment has significant technical advantages, market share continues to increase, and new product development and sales are progressing smoothly, and we speculate that new orders will continue to grow rapidly in 2024. Sufficient orders for CMP and other new equipment such as downgauging will support the high growth of short- and medium-term performance, while the number of CMP equipment continues to rise, and the logic of key consumables and maintenance services is connected, which is optimistic about the company's long-term growth.

In 2024, the company is expected to achieve a net profit attributable to the parent company of 9.7-1.08 billion yuan, a year-on-year increase of +34.02%-+49.22%, of which Q4 is 249-359 million yuan, a year-on-year increase of +55.99%-+124.82%, and the central value is +90.40% year-on-year, with an excellent level of profitability and in line with market expectations. In 2024, it is expected to achieve a net profit of 8.2-910 million yuan after deducting non-attributable to the parent company, a year-on-year increase of +34.84%-+49.64%, of which Q4 is 205-295 million yuan, and the central value is +68.13% year-on-year. Measured by the pivot value, the net profit margin attributable to the parent company/net profit margin deducted from the non-attributable parent in 2024 will be 28.87%/24.37%%, respectively, +0.02pct/+0.12pct year-on-year, maintaining a high level, leading the semiconductor equipment sector. 24Q4 net profit margin attributable to the parent / net profit margin deducted from non-attributable to the parent was 27.70%/22.79%, respectively, +3.77pct/+0.49pct year-on-year, a significant increase in a single quarter, we speculate that the main reason is the scale effect and non-economic profit and loss, of which Q4 is expected to be 43.99 million yuan, which thickens the performance of the profit side to a certain extent and improves the profitability level.

Advanced packaging equipment such as thinning and scribing has built the second curve, and the platform-based growth logic has been gradually realized.

1) Advanced packaging: driven by AI, the advanced packaging industry is accelerating development, is the most prosperous subdivision track, taking TSMC as an example, 24 years Cowos production capacity of 3.5-40,000 pieces per month, 2025 TSMC capital expenditure is expected to be 38 billion to 42 billion US dollars, of which 10-20% for advanced packaging testing, etc., AI demand superimposed domestic substitution, Chinese mainland advanced packaging also has a strong industrial logic. The company's 12-inch ultra-precision wafer thinning machine Versatile-GP300, wafer thinning and film all-in-one machine Versatile-GM300, and 12-inch wafer edge cutting equipment are progressing smoothly, and the company is expected to obtain bulk orders in 25 years.

2) Based on CMP, the platform layout opens up growth space: while consolidating the competitive advantage of CMP, the company continues to enrich the product line layout, (1) Cleaning equipment: it has been used in batches for the company's wafer regeneration production, and the industrialization is smooth; (2) Film thickness measurement equipment: realize small batch shipments and obtain leading batch orders; 3) Ion implantation: The company plans to acquire the remaining 82% equity of its subsidiary Xinyu Semiconductor, and the main product of low-energy and large-beam ion implantation equipment has been commercialized, and the localization rate of equipment parts is higher.

Investment Advice

Guided by the pivotal value of the performance forecast, we slightly raise our 2024-2026 operating income forecasts to 35.52, 47.50 and 6.034 billion yuan respectively (original values of 35.00, 47.40 and 6.034 billion yuan), +42%, +34% and +27% year-on-year; From 2024 to 2026, the net profit attributable to the parent company will be 10.24, 1.337 and 1.702 billion yuan respectively (the original value is 1.009, 1.336 and 1.702 billion yuan), a year-on-year increase of +41%, +31% and +27%; EPS for 2024-2026 will be 4.33, 5.65 and 7.19 yuan (original values of 4.26, 5.64 and 7.19 yuan). 2025/01/23 The stock price of 157.16 yuan corresponds to PE of 36, 28 and 22 times, maintaining the "overweight" rating.

Risk Warning: The

proposed acquisition has not yet been completed and there is uncertainty; Downstream expansion is less than expected; The semiconductor business expansion is less than expected; The company's plan to invest in the construction of Shanghai integrated circuit equipment R&D and manufacturing base has not yet been completed, and there are uncertainties.