Wu Wenji of China Post ** Co., Ltd. recently conducted research on Shengong shares and released a research report "The darkness will pass, waiting for the inflection point", this report gives a ** rating to Shengong shares, and the current stock price is 1965 yuan.
Shengong shares (688233).
Event. On February 22, the company announced its 2023 annual performance report, which is expected to achieve revenue of 14,450 in 2023470,000 yuan, a year-on-year increase of -7320%；Net profit attributable to parent company was -6,327120,000 yuan, a year-on-year increase of -14001%；The net profit deducted from non-attributable to the parent company was -6,666800,000 yuan, a year-on-year increase of -14308%。
Investment Essentials. Cyclical weakness in the economy has put pressure on earnings in the short term. The company expects to achieve revenue of 14,450 in 2023470,000 yuan, a year-on-year increase of -7320%；Net profit attributable to parent company was -6,327120,000 yuan, a year-on-year increase of -14001%；The net profit deducted from non-attributable to the parent company was -6,666800,000 yuan, a year-on-year increase of -14308%, mainly due to the impact of the industry cycle and the global economic environment, the company's large-diameter silicon material business revenue in 2023 decreased sharply year-on-year, the capacity utilization rate declined, and the provision for inventory price decline was made during the reporting period in 2023. At present, the company's silicon parts and wafer business is in the market development period, and its performance contribution is in its infancy, among which the provision for inventory impairment of silicon wafers in 2023 has led to pressure on the net profit attributable to the parent company. In the future, the company will overcome the adverse effects of industry fluctuations and other factors, actively seize opportunities, continue to optimize product structure, steadily expand production scale, and achieve the world's leading competitive advantage by improving many key technical indicators to meet customers' strict requirements for quality.
Expand production against the trend, wait for the recovery of the cycle, and release performance flexibility. According to the company's announcement on October 13, 2023, the company's net amount of funds raised in this private placement is 29.6 billion yuan, after the implementation of the project, it will form an additional annual production capacity of 393,136kg (equivalent to 1,145,710mm) of silicon materials for etching, and the project construction period will be 24 months. The downstream demand of the company's large-diameter silicon materials and its processed products, namely silicon parts and components, is closely related to the capacity utilization rate and new production capacity of end-user integrated circuit manufacturers. In terms of capacity utilization, the capacity utilization rate of mainstream wafer foundry companies has a slow upward trend; In terms of production capacity, SEMI expects global semiconductor monthly wafer (WPM) production capacity to increase by 5After 5% to 29.6 million pieces (in 200mm equivalent), it is expected to grow by 64%。At present, the bottom of the cycle is expected to usher in an inflection point. In the future, the company will optimize the product structure according to the demand of the downstream market, further increase the proportion of large-diameter products with a high gross profit margin of 16 inches and above, and actively expand the business of polysilicon materials for etching to improve profitability.
Investment advice. We expect the company to achieve revenue of 145/2.26/6.0.7 billion yuan, respectively, to achieve a net profit attributable to the parent company -063/0.07/1.6.3 billion yuan, taking into account the provision for inventory decline and fundraising depreciation, etc., we expect the company's performance in 2024 to be repaired, and the current stock price corresponds to 23 times PE in 2025, which is covered for the first time and given a "** rating."
Risk Warning. Customer concentration risk, business concentration risk, raw material fluctuation risk, business fluctuation and decline risk, market development and competition risk, industry risk, macro environmental risk, raised funds investment project construction risk, new depreciation and amortization affect the company's profitability risk.
*According to the calculation of the research report data released in the past three years, the research team of CITIC Li Chao has conducted in-depth research on the stock, and the average accuracy of the past three years is 3404%, and its ** attributable net profit in 2023 is 23.9 billion, 13.00 million based on the current price15。
The latest profit** breakdown is as follows:
A total of 2 institutions have rated the stock in the last 90 days, ** 2 ratings; The average institutional price target over the last 90 days is 4766。
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