dragontigerdragon| Zhongwei Company (688012): Etching equipment revenue increased by 64% year-on-year, strengthening R & D and promoting platformization

1Q24 revenue increased 31% year-on-year, while non-profit and loss decreased and expenses increased, resulting in a slight decline in homed net profit. 1Q24 realized operating income of 16.Dragontigerdragon.500 million yuan (YoY + 31)Dragontigerdragon2.2% QoQ-27.8%), the net profit of returning to the mother is 249 million yuan (YoY-9.5% QoQ-60.2%), deducting the non-return net profit of 263 million yuan (YoY+15.4%,QoQ-42.6%). The decline in performance is due to seasonal factors. The main reasons for the decline in net profit from the same period last year are as follows: 1) 1Q24's non-recurrent profit and loss due to the fair value of equity investment held by the company decreased by about 41 million yuan due to the decline in share price, and government subsidies decreased by 23 million yuan over the same period last year.Dragontigerdragon2) the expenses during the period increased compared with the same period last year, including R & D expenses of 214 million yuan (YoY + 62.1%), sales expenses of 73 million yuan (YoY + 42.7%), and management expenses of 73 million yuan (YoY + 32.7%). Sales of etching equipment increased by 64% compared with the same period last year, and the increase in inventory and contract liabilities showed that orders were full. The revenue of 1Q24 etching equipment reached 1.335 billion yuan (YoY + 64.1%), and the proportion of revenue increased to 83.2% (1Q23 LED 66.6%). Affected by the fluctuation of MOCVD terminal market, MOCVD equipment income was 38 million yuan (YoY-77.3%). Due to the fluctuation of capacity utilization of downstream semiconductor customers, the income of spare parts and services is about 232 million yuan (YoY-4.4%). By the end of 1Q24, the contract liability increased to 1.169 billion yuan (QoQ + 51.5%). The output and shipment of etching equipment increased significantly, and the company received more payments resulting in an increase in the balance of contract liabilities; inventory increased to 5.584 billion yuan (QoQ + 31.1%), due to the order growth of the company's procurement of raw materials, mass production machines and shipping machines to customers. The verification of the advanced process etching machine is smooth, and the coverage of the film deposition process is improved. In 2023, the company's CCP and ICP etching equipment in the domestic main customers chip production line listing share greatly increased, for 28nm and below Damascus process CCP etching machine has entered the domestic leading customers to carry out on-site verification, ultra-high aspect ratio etching machine in advanced storage plant verification, TSV etching equipment is increasingly used in advanced packaging and MEMS device production. Four LPCVD devices and ALD devices have entered the market, three of which have been certified by customers and have begun to receive repetitive orders.DragontigerdragonMore than a dozen kinds of thin film deposition equipment will enter the market one after another. A number of new products such as newly developed silicon and germanium silicon epitaxial EPI equipment, wafer EPI epitaxial equipment and wafer edge Bevel etching equipment will also be put into the market in the near future. Investment suggestion: domestic semiconductor advanced process equipment company, maintain the "buy" rating. We maintain the profit forecast of 2024-2026 operating income of 83.79xpx 10537x13225 million and homecoming net profit of 2.5893.407 billion yuan. the current stock price corresponds to 40.8kg PE in 2024-2026, maintaining the "buy" rating. Risk tips: downstream wafer manufacturing capacity expansion is not as expected risk, new product development is not as expected risk, international relations fluctuation risk and so on. [disclaimer] this article only represents the views of a third party and does not represent the position of Hexun. Investors operate accordingly, at their own risk.

[disclaimer] this article only represents the views of a third party and does not represent the position of Hexun. Investors operate accordingly, at their own risk.