Editor's note: the global chip industry boom is continuing to heat up, and the domestic semiconductor industry is expected to usher in a "golden decade". International Semiconductor Equipment and Materials Industry Association (SEMI) recently announced that in June, the North American semiconductor equipment order shipment ratio from May 1.00 rose to 1.09, touching a high point since November 2013, the indicator is an observation of the semiconductor chip industry, the semiconductor industry is expected to see a "golden decade". It is understood that the indicator is an important indicator to observe the semiconductor boom, greater than 1 on behalf of manufacturers to receive orders good, optimistic view of the future.
Huatian Technology: Cost and Technology Management Advantages, Continued Rapid Growth in the Future
Huatian Technology 002185
Research Institutions: Shenyin Wanguo Securities Analysts: Mr. Zhang Writing Date: 2014-07-14
The three-location layout is completed, and the cost and technology advantages are both available. The company has completed the layout of Kunshan, Xi'an and Tianshui, with a clear division of labor between high, medium and low-end production lines and cost and technology advantages. Kunshan Huatian has comprehensively laid out WLCSP, Bumping, TSV and other advanced packaging technologies. Xi'an Huatian and Tianshui Huatian are engaged in middle and low-end packaging with obvious cost advantages.
Management direct control, significant advantages in equity structure. Among the 12 directors, supervisors and senior management of the company, 9 of them are the actual controllers of the company, holding 42.92% of the shares of the parent company. This shareholding structure makes the interests of major shareholders, management and small and medium-sized shareholders highly consistent, with significant advantages in shareholding structure.
Bumping+FC business will be launched at the end of the year, and future high growth can be expected. It is expected that Kunshan Huatian will start the large-scale mass production of 12-inch Bumping in the fourth quarter of this year, and the monthly production capacity will reach 5,000 pieces. With the rapid growth of Bumping market scale, the company is expected to rapidly expand production capacity, and will also drive the rapid growth of Xi'an Huatian FC business, future high growth can be expected.
MEMS encapsulation technology advantage is obvious, waiting for the time of large-scale mass production, MEMS into the rapid development of the third wave, in the next few years will become the main driving force for the growth of WLCSP encapsulation technology. The company will carry out the production of 8-inch products, compared with the current mainstream 6-inch MEMS products with better consistency, the main products include accelerometers and fingerprint identification two areas, will be waiting for the time of large-scale mass production.
First cover, give hold rating: we expect the company 14-16 years EPS for 0.40 yuan, 0.52 yuan, 0.62 yuan, corresponding to 14-16 years of PE for 28.2X, 21.8X, 18.2X, we believe that the company's advanced encapsulation business, mid-range encapsulation business, low-end encapsulation business, a reasonable valuation of the business level were 15 years 40 times, 30 times. 20 times, corresponding to the target price of 13.2X, 20 times, 20 times, corresponding to the target price of 13.32 yuan, the first cover to give a hold rating.
Risks of core assumptions: 1) the implementation of the national IC support policy is lower than expected; 2) Bumping large-scale mass production time delay; 3) WLCSP-based CIS product demand decline. www.southmoney.com
Jingfang Technology: performance in line with expectations and long-term benefit from import substitution
Jingfang Technology 603005
Research Institution：Shanxi Securities Analyst：Zhang Xu Date：2014-04-01
Event：
The company announced its 2013 annual report. The company's 2013 revenue was 450 million yuan, an increase of 33.53% over the same period of the previous year; net profit attributable to owners of the parent company was 153 million yuan, an increase of 11.47% over the same period of the previous year; and basic earnings per share was 0.81 yuan, an increase of 10.96% over the same period of the previous year. Net assets attributable to the parent company amounted to 750 million yuan, an increase of 19.73% over the same period last year. The company intends to pay a cash dividend of 1.5 yuan (including tax) for every 10 shares to all shareholders, with no stock dividend and no capitalization of capital surplus.
Event Analysis:
Benefiting from the industry recovery, the company's revenue is stable. 2013, benefiting from the slow recovery of the global economy, the growth rate of the semiconductor market has seen a cyclical rebound. China's integrated circuit industry in smart phones, tablet PCs and other end products continued to grow driven by sales growth of 16.2%. While the overall industry scale grew rapidly, the industry structure showed a differentiated growth trend, in which the growth of the packaging and testing industry slowed down significantly, with a growth rate of 6.1%. In this context, in 2013, the company continued to focus on packaging business in the field of sensors, to grasp the favorable timing of the development of CMOS, MEMES, smart cards, biometrics and other chip areas, to maintain a stable growth trend throughout the year.
The company is the first wafer-level chip size packaging manufacturer in mainland China. Wafer-level chip size packaging technology is characterized by the completion of the wafer manufacturing process directly on the wafer packaging, and then wafer cutting, encapsulated chip and the original bare chip size is basically the same, in line with the development of consumer electronics short, small, light, thin needs and trends. At present, the technology is mastered by only a few companies, the company as the first in mainland China, the world's second largest can provide large-scale image sensing chip wafer-level chip size packaging and mass production of professional packaging and testing company, has the advantage of technological first mover advantage and scale advantage.
The company will benefit from import substitution in the long run, and there is huge room for development. At present, foreign enterprises in China's chip manufacturing and packaging and testing sales revenue accounted for more than 80%, the domestic set of enterprises are facing a serious test. At the same time, with the continuous growth of domestic demand for consumer electronics, China has surpassed the United States, becoming the world's largest consumer electronics market. Continuously growing demand for consumer electronics, but also China's integrated circuit enterprises are facing a good opportunity for development, the company's long-term benefit from import substitution.
Profit forecast and investment advice:
Profit forecast and investment advice. The company is the first mainland wafer-level chip packaging manufacturers, technology in the upper reaches of the industry. With the increasing global status of the domestic market and the continued promotion of domestic industrial policy, China's integrated circuit market will become the world's most dynamic and promising market. The company's future development space is large, we are optimistic about the company's future development prospects, taking into account the recent introduction of semiconductor support policy is expected, the first time to give the company "hold" investment rating.
Investment risk:
Industry fluctuation risk; exchange rate fluctuation risk
Changdian Technology: Advanced packaging performance inflection point established
Changdian Technology 600584
Research Institutions: Shenyin Wanguo Securities Analyst: Zhang (張騄) Date: 2014-07-07
Selected advanced encapsulation technology, the growth path is clear. The path is clear. The company is now the largest packaging and testing company in China and the sixth largest in the world. By virtue of the scale advantage of the company in advanced packaging technology R & D expenditure is much higher than that of comparable companies in the same industry, advanced packaging technology in advance, to realize the full layout of advanced packaging technology, outlining a clear and clear path of growth in the medium and long term.
Bumping + FC business certainty of high growth. When the chip process progresses to below 40/45nm, Bumping+FC packaging method becomes an inevitable choice. This year is the big year of 28nm scale mass production, Bumping market scale will grow rapidly. The company has many years of technology accumulation in this field and realize large-scale mass production, benefiting from the industry trend will get certainty of high growth. Semiconductor Manufacturing International Corporation (SMIC), a subsidiary of the company, is the icing on the cake, and is expected to cut into the high-end products of international IC design houses.
TSV and MIS are leading technologies with huge room for future growth. The company's TSV technology and MIS materials in two areas of leading technology, the future of these two areas will be sitting on nearly 10 billion U.S. dollars of market space, and high-speed penetration of the inflection point of the period is approaching, is expected to become the largest beneficiaries of the industry's scale of explosive growth. 2Q performance inflection point established. The company announced on July 2 performance forecast announcement, 2Q single-quarter net profit of about 50 million yuan. This is mainly benefited from the end of the low-end production line relocation pains, labor cost advantages appear; advanced encapsulation technology in the early period of large R & D investment, with the mass production scale to enhance the beginning of the performance release period; and rapid growth of the advanced encapsulation business on the company's overall performance to promote the role of the increase in the 2Q performance inflection point is established.
First cover, give buy rating: we expect the company 14-16 years EPS for 0.24 yuan, 0.42 yuan, 0.67 yuan, corresponding to 14-16 years of PE for 42.5X, 24.1X, 14.9X, we believe that the company's advanced encapsulation business, mid-range encapsulation business, low-end encapsulation business reasonable valuation level are 15 years 40 times, 30 times. 20 times, corresponding to the target price of 12.5 times, 20 times, corresponding to the target price of 12.67 yuan, the first time to cover the buy rating.
Risks of core assumptions: 1) earnings recovery can not be sustained; 2) the implementation of the national IC support policy is lower than expected; 3) SMIC advanced process volume production problems.
Tongfang Guoxin: core chip localization is the trend just need patience
Tongfang Guoxin 002049
Research Institution: Great Wall Securities Analyst: Jin Wei Date: 2014-04-28
Investment Advice
The company, as a member of the first echelon of the domestic smartcard chip makers, has a cash-flow business in its hands similar to the second-generation ID chip. ID card chip cash flow business, but also the upcoming outbreak of financial IC card and mobile payment product reserves, in the core chip localization trend, the company will steadily benefit. In addition, State Microelectronics, as a leading enterprise in the military special components industry, is also expected to steadily benefit from the construction of military informationization. The company will still consider a series of subsequent acquisitions to quickly enter other IC industries. We predict that the company's 2014-2016 EPS were 1.18 yuan, 1.59 yuan and 2.08 yuan, corresponding to the current share price PE were 36x, 27x and 21x, maintain the "recommended" rating.
Investment highlights
Company quarterly revenue and net profit year-on-year double-digit growth: the company's quarterly operating income grew 26.5% year-on-year, net profit attributable to shareholders of the parent company grew 21.0% year-on-year, after deducting non-net profit attributable to shareholders of the parent company grew 87.9% year-on-year. The company's traditional business maintains stable growth, financial payment products and special integrated circuit new products are gradually entering the market, began to contribute to revenue.
Gross profit margin improved in the first quarter: The company's overall gross profit margin was 32.1% in the first quarter, compared with 30.4% in the same period last year. It is expected to be mainly due to the 4GSIM card chip as well as the improvement of the business of State Microelectronics.
The company's expense rate control in the first quarter is better: the company's expenses in the first quarter accounted for 15.1%, compared with the same period last year's 18.5% has dropped significantly.
Company accounts receivable ratio rose: the company's accounts receivable of 470 million yuan in the first quarter, accounting for 255.3% of revenue, compared with 244.5% a year earlier, a slight increase. Inventory did not change much compared with the same period last year.
Company's operating cash flow is better than the same period last year: the company's net operating cash flow in the first quarter of 43.8 million, compared with the same period last year to the good. n2014 SIM-SWP card chip as well as the financial IC card chip fear that the company can not bring greater revenue, but we are still more confident in the company in 2014 to achieve a 30% year-on-year growth in net profit, the reasons are as follows:
The second-generation ID card chip will be the company's cash flow business for a long time: the company as the Ministry of Public Security designated one of the four second-generation ID card chip manufacturers (the remaining three are the CLP Huada, Huahong design and Datang Microelectronics), since 2003 has been for the Ministry of Public Security to provide the second-generation ID card chip. For reasons of confidentiality of residents' information, the Ministry of Public Security has not certified any other chip manufacturers in the past ten years. We expect that the second-generation ID chip business will exist as the company's cash flow business for a long time, providing protection for the company's overall performance. The company's operating profit of 34% or so from the ID card chip business, as long as the business of the Ministry of Public Security does not introduce new competitors, the company's performance will have a more solid foundation. In addition, taking into account the 2005-2006 ID card issuance peak, 2015-2016 fear of a wave of replacement of the peak arrival, we expect the company's ID card chip business in 2014-2016 will show a steady rise in the situation, for the company's overall performance growth to lay a more solid foundation.The company's SIM card business will continue to grow and improve the gross profit margin: the company last year SIM card shipments of about 700 million, compared with 2012, an increase of 56%. Under the premise that the unit price is basically unchanged, the company's gross profit margin increased from about 6% to 12%-13%. With 5 billion SIM cards issued globally in a year, the company currently occupies about 14% of the global market share. We expect the company's SIM card issuance volume will rise further under the scale effect, and in addition, the company's SIM card gross margin is still expected to rise further due to the rising proportion of 4GSIM card purchases for large storage. We expect the company is expected to issue 1 billion SIM cards this year, the gross profit margin will be close to 15%, is expected to provide the company with about 4,000 yuan of operating profit, accounting for more than 10% of the company's overall operating profit.
Benefit from the military information technology construction speed up, the state microelectronics will maintain about 25%-35% performance growth rate: Tongfang Guoxin's another subsidiary of the state microelectronics is mainly engaged in the design, development and sales of integrated circuits, the company has all of the special integrated circuits industry qualifications required. The company is a leading enterprise in the domestic special components industry, and is the enterprise with the most categories and the most complete varieties in the domestic special components industry. Up to now, the company has completed nearly 200 products and invested more than 900 million yuan in scientific research, of which more than 300 million yuan has been invested in the support of the major special project of "Nuclear High-altitude Base". Compared with its counterparts, the company has the most complete range of products and the most varieties, with more than 100 kinds of products available for sale at present. State Microelectronics in the research project into a strong product capability, more than 50 research projects, an average of nearly 30 new products. China's military IC market totaled 6 billion, domestic companies accounted for only 6 billion, state-owned military enterprises have more room for development. We are optimistic about the development of State Microelectronics in the wave of military information technology construction, but also optimistic about the company's attempts to convert the military to civilian.
The company is expected to benefit from the localization of financial IC card chips in 2015: China's bank card industry is currently experiencing EMV migration, the magnetic stripe cards of the banks are initially replaced by chip cards, the annual addition of new chip cards in 2013 for the annual addition of about 47% of the bank card. We expect that 400-500 million chip cards will be added in 2014, mainly from the strength of joint-stock banks, and the chip card penetration rate will further increase. At present, the card vendors basically use NXP's chip, with Hua Hong design passed the CC's Eal4+ certification, the technology gap between domestic chip manufacturers and foreign chip manufacturers is further narrowing. At present, NDRC is organizing several chip companies, including Tongfang Guoxin, to carry out local area scale card issuance test, once the security is verified, under the endorsement of the national credit, domestic banks will gradually adopt domestic IC card chips to replace imported IC card chips. We expect that 2014 will be a year of domestic chip makers, after a year of real network testing, domestic chip makers are expected to compete head-on with foreign manufacturers in 2015, when the cost will be an important factor in considering whether domestic chip makers can access the market. Core chip localization is the general trend, domestic chip companies are narrowing the gap with foreign companies, this time the need is patience.
Investment advice: the company as a member of the first echelon of domestic smart card chip makers, the hands of both similar second-generation ID card chip cash flow business, but also the upcoming outbreak of financial IC card and mobile payment product reserves, in the core chip localization trend, the company will steadily benefit. In addition State Microelectronics as a military special components industry leading enterprises are also expected to steadily benefit from the military information construction. The company will still consider a series of subsequent acquisitions to quickly enter other IC industries. We predict that the company's 2014-2016 EPS were 1.18 yuan, 1.59 yuan and 2.08 yuan, corresponding to the current share price PE were 36x, 27x and 21x, maintain the "recommended" rating.
Risk warning: 2014 SIM card chip price war, the company's health card sales less than expected, the State Microelectronics earnings less than expected.
Seven Star Electronics
The company is a leading IC equipment manufacturer in China, with IC manufacturing process technology as the core, and large-scale IC manufacturing equipment, hybrid integrated circuits and electronic components as the main business. The company has excellent technology research and development team, with first-class production environment, processing means and testing instruments, is China's largest electronic equipment production base and high-end electronic components manufacturing base. It is the backbone enterprise which undertook the major scientific and technological research tasks of national electronic special equipment during the period from "Sixth Five-Year Plan" to "Tenth Five-Year Plan", and is the only company with the production capacity of 8-inch vertical diffusion furnace and cleaning equipment in China. The company's hybrid integrated circuits and other military supporting products in the "Shenzhou V", "Shenzhou VI", "Shenzhou VII", "Chang'e I", "Long March" series of rockets, and other military products.
Shanghai's products have been applied in the space mission of "Shenzhou V", "Shenzhou VI", "Shenzhou VII", "Chang'e I", Long March series of rockets, and a number of national key projects.
Shanghai Xinyang
The company is a technology-driven, high-tech enterprise based on independent innovation, specializing in the semiconductor industry required for the research and development of electronic chemicals, production and sales services, while the development of supporting special equipment, is committed to providing customers with chemical materials, supporting equipment, application process, on-site service integration of the overall solution. The company's leading products include electronic chemicals for lead surface treatment and electronic chemicals for wafer copper plating and cleaning, which can be widely used in the field of semiconductor manufacturing and packaging. The company's products are mainly based on the core technology of electronic cleaning and electronic plating. The company has a specialized R&D organization, with a group of professional R&D teams with rich experience and high R&D level, and has obtained 3 national invention patents, many utility model patents and many Shanghai high-tech achievement transformation projects. The company has been recognized as "the most independent innovation ability enterprise" by China Enterprise Innovation Achievement Case Validation Committee and China Association of Small and Medium Enterprises, and has been awarded as Shanghai Foreign Invested Advanced Technology Enterprise, Shanghai Science and Technology Innovation Enterprise, Shanghai Patent Work Cultivation Enterprise, Shanghai AAA Grade Enterprise of Honoring Contracts and Keeping Promises.
Zhongying Electronics
The company is one of the leading IC design companies in China, engaging in the design and sales of IC products and providing related after-sales and technical services. The IC products designed and sold by the company are mainly MCUs, and the products are mainly applied to the control of small home appliances and computer digital products. The company is one of the first batch of IC design enterprises recognized by the Ministry of Industry and Information Technology of China and Shanghai Informatization Office, and has been recognized as Shanghai High-Tech Enterprise for 11 consecutive years. The company has obtained 10 invention patents and 4 utility model patents in China and 5 invention patents in Taiwan, 84 registered IC layout design rights and 7 registered software copyrights.