2021-11-25 Zhao Jin and Zheng Biyu of Guojin Securities Co., Ltd. conducted research on Shengmei Shanghai and issued a research report "leading the localization of semiconductor cleaning equipment and accelerating platform layout". This report gives a buy rating to Shengmei Shanghai. It is believed that its target price is 165.80 yuan, and the current stock price is 136.8 yuan, with an expected increase of 21.2 percent.
Shengmei Shanghai (688082)
Shengmei Shanghai is the leader of domestic semiconductor cleaning equipment, and the downstream customers are mainly Hua Hong Semiconductor, Yangtze River Storage, Hynix and so on. The company is a global layout enterprise of deep ploughing semiconductor wet equipment, cleaning equipment accounts for 84% of revenue, and continues to expand to semiconductor electroplating equipment and advanced packaging wet equipment, vertical furnace and so on. From 2017 to 2020, the income / return net profit CAGR was 58% and 62% respectively, and the overall gross profit margin of 45% was comparable to that of international giants such as ASML and AMAT. The company issued 43.36 million shares of IPO, and actually raised 3.7 billion yuan to invest in equipment R & D and manufacturing centers, high-end semiconductor equipment R & D projects, plus code cleaning, electroplating, advanced packaging and furnace tube equipment R & D and production.
Cleaning equipment industry: the technical difficulty increases, the number of cleaning steps increases rapidly, and the market space expands year by year. 1) cleaning equipment accounts for about 5% of wafer processing equipment, and the global cleaning equipment market is expected to be about US $3 billion. 2) the number of cleaning steps accounts for more than 30% of all chip manufacturing process steps. With the continuous progress of technology nodes, the demand for cleaning equipment will increase accordingly. From more than 100 steps in the 80-60nm process to more than 200 steps in the 20-5nm process. 3) in the competitive landscape, Deans of Japan accounts for 50% of global cleaning equipment sales, Tokyo Electronics of Japan accounts for 27%, Lam Research Corp of the United States accounts for 12%, and Shengmei Shanghai only accounts for 3% of the market.
The company's differentiated technology route is recognized by the market, and the domestic penetration rate is gradually improved. The company has developed differential technology to successfully solve the two difficult problems of uneven and easy to damage in mega sound cleaning. The new product monolithic / slot combined cleaning equipment continues to lead the technological progress, and the overall product covers up to 80% of the cleaning types that can be solved in the cleaning equipment market. According to the international bidding network, the proportion of the company's cleaning equipment in the Yangtze River Storage, Huali and Huahong Wuxi production lines is increasing year by year.
Based on cleaning equipment, the company expands in the direction of electroplating and advanced packaging equipment, and the size of the target market is at least doubled. In terms of product expansion, it is judged that the company's electroplating / advanced packaging equipment / vertical furnace tube equipment corresponds to the global market space of US $17-2 billion, respectively. With the promotion of customer verification of the company's new products, the proportion of non-cleaning equipment is gradually expanding, with 2021H1 accounting for 17%.
Investment suggestion
It is estimated that the company's revenue from 2021 to 2023 will be 16x26 / 3.6 billion yuan, a growth rate of 63%, 38%, 36%, 2.8 and 640 million yuan, respectively, with a growth rate of 41%, 77%, 30%, and a PS of 36, 23, 17x. Most domestic semiconductor equipment manufacturers only ship to Chinese mainland wafer foundries, and the company has obtained repeated orders from Hynix, a major international memory manufacturer in South Korea, and the differentiated technology route of independent research and development has been widely recognized, giving the company a certain valuation premium, covering for the first time, giving 2023 20 times PS, the target price of 165.8 yuan, and a "buy" rating.
Risk hint
The company's downstream customer verification expansion is less than expected risk; market competition aggravates the risk; the risk of relying on some key parts suppliers.
The stock has been rated by three agencies and two buy ratings in the last 90 days; the average institutional target price in the past 90 days is 110.11; according to the Securities Star valuation analysis tool, Shengmei Shanghai (688082) good company has a rating of 4 stars, a good price rating of 0.5 stars, and a comprehensive valuation rating of 2 stars. (rating range: 1-5 stars, up to 5 stars)