To pure science and technology (603690)
Domestic high purity process system leader, after the launch into the semiconductor cleaning equipment business
To pure science and technology is mainly engaged in the high purity process system and semiconductor wet cleaning equipment business, 2019 revenues of 637 million yuan and 0.82 billion yuan, accounting for 65% of the total revenue and 8%. Among them, the semiconductor cleaning equipment business, although started a little later, but the market space is large, fast growth rate, is the company's biggest business highlights. 2015-2019 the company's revenue grew from 208 million yuan to 986 million yuan, with a CAGR of 48%, and the net profit attributable to the mother of the company grew from 17.7 million to 110 million, with a CAGR of 57%.
In 2019, the company's acquisition of Waveway Technology to enter the optical sensor market, the industry chain downward extension at the same time will also form a synergistic effect with the existing pan-semiconductor industry, a number of businesses.
High-purity process system: the domestic leading position is stable, providing stable cash flow for the company
High-purity process system is to provide overall solutions for the downstream business, belonging to the industry-specific system integration business, is an important part of the manufacturing enterprises to build new plants and production lines of the investment in fixed assets, accounting for about 5% -8% of the total investment in fixed assets.
The company's high-purity process system of domestic leading position gradually stabilized, customers choose the system supplier is very careful, customer stickiness is high, is expected to maintain the future annualized compound growth of 10% -20%. At present, the industry's leading technology and has the strength and experience to undertake large projects of local enterprises are fewer, showing a high degree of concentration in the high-grade market (mainly foreign leaders), the low-grade market is more decentralized competition pattern. Jiang Yuan, chairman of the company, used to be the marketing director of the industry leader of the United States Kaneidis in China, the team's deep accumulation of technology, to help the pure system integration business to gradually realize the import substitution. 2012-2019 high purity process system revenue from 137 million yuan to 637 million yuan, a compound growth rate of 25%, is to provide the company with solid growth in cash flow of the business segments. The main downstreams are medical, photovoltaic, semiconductor, etc., and the order growth is closely related to the fixed asset investment of downstream customers. We expect high purity process system revenue from 2020 to 2022 to be 8.6, 1.04, 1.14 billion yuan respectively.
Into the field of semiconductor cleaning equipment, track good space, easy to take the lead in the realization of the full localization
Cleaning equipment in the semiconductor equipment market value accounted for about 5-6%, compared to the photolithography, etching, and other core equipment value is low. At the same time, the technology threshold is also lower, it is easier to take the lead to achieve full localization, so the market space. We expect mainland China's annual wet cleaning equipment in the space of 1.5-2 billion U.S. dollars, to 2023 cleaning machine localization rate of up to 40% -50%, that is, the market space of domestic equipment in the 4-7 billion yuan. And it is expected that the future 12-inch wafer groove and monolithic cleaning equipment will be the main incremental market, in which the monolithic cleaning machine to pure is expected to become one of the few domestic equipment vendors with core technology.
The company's semiconductor cleaning equipment mainly consists of wet method slot cleaning equipment (low difficulty) and monolithic cleaning equipment (high difficulty). batch shipments will start from 2019, and the current slot cleaning equipment and monolithic cleaning equipment can be applied to 8-inch and 12-inch wafers. The company has rapidly accumulated high-end customer resources such as SMIC, Beijing Yandong, TI, and China Resources by virtue of its technological advantages, and new orders for wet process equipment in 2019 totaled 170 million yuan (as of the end of 2019, the cumulative total of nearly 40 formal orders have been obtained, and nearly 20 sets of equipment installation has been completed). At present, the first phase of the company's Qidong production base is fully completed, and has reached a capacity of 48 sets/year, and the first and second phases*** are planning 96 sets/year, and the company issued convertible bonds in December 2019 to raise 356 million yuan to invest in the production and manufacture of slot and monolithic cleaning equipment. The project is expected to reach production in 2022, and is expected to initially contribute up to 900 million yuan to the revenue scale of the cleaning machine business. We expect 2020 to 2022 semiconductor equipment revenue of 16, 2.9, 500 million yuan, respectively.
Earnings forecast and investment rating:
We expect the company's 2020-2022 net profit of 150 million, 210 million, 280 million, the current share price corresponds to the dynamic PE were 53 times, 38 times, 29 times, in the comparable companies in the lowest position, we are optimistic about the development of the company's semiconductor cleaning equipment business, there is room for enhancement of valuation. The first cover to give "hold" rating.
Risks: semiconductor business progress is less than expected; gross margin fluctuation risk; acquisition synergies less than expected.
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