Ping An ** shares *** Fu Qiang, Xu Biyun recently conducted research on Xinqi Micro Packaging and released a research report "Grasp the Trend of Industry Upgrading and Domestic Substitution, Multi-point Flowering in the Pan-semiconductor Field", this report gives an overweight rating to Xinqi Micro Packaging, and the current stock price is 8605 yuan.
Xinqi micro assembly (688630).
Ping An viewpoint: the leading domestic direct-writing lithography equipment, products are widely used in PCB and pan-semiconductor fields: Xinqi Micro was established in June 2015 and listed on the Science and Technology Innovation Board of the Shanghai Stock Exchange in March 2021, headquartered in Hefei, Anhui Province. The company is deeply engaged in pan-semiconductor direct writing lithography equipment and PCB direct imaging equipment, and has grown into a leading enterprise of direct writing lithography equipment in China. In the field of PCB, the company's market share of direct imaging equipment has been continuously improved, and it has accumulated a series of customers such as Jianding Technology, Shennan Circuit, Pengding Holdings, Kinwong Electronics, TTM Group, etc., and has achieved full coverage of the top 100 PCBsIn the field of pan-semiconductors, the company has continuously launched direct-writing lithography equipment for discrete power device manufacturing, IC mask manufacturing, advanced packaging, new displays, photovoltaic electroplating copper plating, etc., and the application scenarios have been continuously expanded, accumulating customers such as Huatian Technology, Visionox, Chenxian Optoelectronics, Silicon Miles, and Lead Semiconductor. Thanks to the simultaneous development of new and old businesses, the company's operating income from 2019 to 2022 will grow at an average annual compound growth rate of 4774%。In the first three quarters of 2023, the company achieved operating income of 52.4 billion yuan, a year-on-year increase of 2730%, net profit attributable to the parent company 11.8 billion yuan, a year-on-year increase of 3491%。From the perspective of revenue structure, PCB equipment is the core product and contributes more than 70% of the gross profit, but the rapid growth of pan-semiconductor equipment sales revenue in the past two years is particularly prominent, and the proportion of revenue has increased year by year.
Benefiting from the trend of high-end PCB, the PCB solder mask business is expanding simultaneously: With the development of downstream electronic products in the direction of portability, light and thin, and high performance, the product structure of the PCB industry has been continuously upgraded. According to Prismark data, mid-to-high-end products such as HDI boards, flexible boards and IC substrates currently account for more than half of the PCB market. As a maskless lithography technology, direct writing lithography technology has comparative advantages in terms of accuracy, yield, cost, flexibility, production efficiency, and many other aspects compared with traditional equipment, which can meet the technical needs of high-end PCB products and become the mainstream technical solution of the best process in PCB manufacturing. With the continuous growth of the scale of the domestic PCB industry, the high-end demand for superimposed PCB has given rise to the upgrading of existing PCB equipment, and the demand for direct imaging equipment to replace the existing traditional equipment is strong. According to QYContin data, it is expected that by 2023, the sales of direct imaging equipment in China's PCB market will reach about 4$9.4 billion. The company grasps the development trend of the downstream PCB manufacturing industry, and its business scope expands from the low-end PCB market such as single-layer boards, multi-layer boards, and flexible boards to the high-end markets such as HDI boards, carrier-like boards, and IC substrates, and continuously improves the technical level of PCB circuits and solder masks.
In the field of pan-semiconductors, the company's products are used in the manufacturing of IC, MEMS, biochips, discrete power devices, IC mask manufacturing, advanced packaging, display lithography, photovoltaic electroplating copper plating, etc., further accelerating the process of self-development and marketing, and the growth space continues to expand. In terms of carrier boards, advanced packaging has driven the growth of the ABF carrier board market, and the company's 4 M equipment has been sent to the client for verification. In terms of advanced packaging, the company is one of the few leading companies engaged in the development of advanced packaging direct writing lithography equipment, the company's direct writing lithography equipment is very advantageous in rewiring, interconnection, intelligent correction, etc., the current cooperation customers are Huatian Technology, Shenghe Jingwei and other well-known enterprises, the equipment has been in the client side for mass production and stability testing. In terms of mask plate making, the company's first mask plate making equipment that meets the needs of mass production of 90nm node plate making has been verified on the client side. In terms of new displays, the company's NEX series products have been applied to the Mini-LED packaging process, and successfully realized the industrialization of NEX-W (white oil) models that meet the needs of Mini-LED. In terms of photovoltaics, electroplating copper is an important technology for photovoltaic silver reduction and cost reduction, and the company has technical reserves in both direct and non-direct writing solutions, and can provide corresponding graphical technical solutions according to the selection of various technical routes of downstream photovoltaic manufacturers, and the equipment has been verified by many downstream customers.
Grasp multiple industry opportunities, fixed increase investment and expansion and technology upgrading: the trend of PCB manufacturers in the industry to build factories in Southeast Asia is accelerating, and industrial relocation has brought new demand for expansion, the company has strong competitiveness in medium and high-end PCB equipment, and has accumulated deep high-quality customer resources, and domestic substitution is at the right time. The company will raise funds to deepen and expand the industrial application of direct writing lithography equipment, broaden the coverage of downstream markets, and increase equipment production capacity. In the future, with the implementation and completion of the company's private placement and investment projects, the production capacity of substrate-like and solder mask equipment will be greatly increased, and with the advantages of cost performance and local services, the import substitution strategy will continue to advance, promote the high-end upgrading of the company's direct writing lithography equipment product system, and accelerate the rapid growth of product market penetration.
Investment suggestion: The company has accumulated deep experience in direct-writing lithography technology, leading the domestic market share in the PCB direct-writing lithography equipment market, achieving full coverage of mainstream customers, and at the same time, the products are also continuously expanding and extending in the field of pan-semiconductors, and strategic cooperation with leading customers in various subdivisions, and maintaining rapid growth in orders in hand. As a subdivision leader of domestic direct-writing lithography equipment, with the growth of domestic demand for high-end PCB and the increase in demand for localization rate, and the company accelerates the layout of carrier boards, advanced packaging, new displays, reticle plates, power discrete devices, photovoltaic electroplating copper, etc., related products will further improve the breadth of the company's product line coverage, further open up the growth space, and the revenue scale is expected to continue to expand. We expect the company's EPS to be 139 yuan, 202 and 290 yuan, corresponding to the PE of the ** price on December 22 were 620x、42.6x and 297x, we are optimistic about the company's market share increase potential in the field of mid-to-high-end PCB, as well as the expansion of overseas customers, and at the same time optimistic about the deepening and industrialization potential of direct writing lithography technology in various application fields of pan-semiconductors.
Risk Warning: (1) The investment of domestic PCB manufacturers is less than expected. If the number or progress of PCB factory investment is less than expected, the growth rate of equipment demand will slow down, and the company's performance growth may not meet expectations. (2) The risk of pan-semiconductor direct writing lithography equipment market expansion and technology development. In the field of pan-semiconductors, the company's direct-writing lithography equipment is currently in the stage of R&D and trial production customer verification, and there is a certain risk of limited industrial application in the future. and (3) the risk of increased competition. In the future, if the company cannot timely and accurately grasp the market demand and technology trends, and continue to launch competitive new products to meet the new market demand, it will be left behind in the competition and have an adverse impact on the operating performance.
*According to the calculation of the research report data released in the past three years, the research team of Xu Feng in Shanxi Province has conducted in-depth research on the stock, and the average accuracy of the past three years is as high as 9286%, and its ** attributable net profit in 2023 is 21.1 billion, 5359。
The latest profit** breakdown is as follows:
A total of 16 institutions have rated the stock in the last 90 days, with 11 ** ratings and 5 overweight ratingsThe average institutional price target over the last 90 days is 840。
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