KINGSEMI(SH:688037) Huafu Securities·2024-06-23 06:00Investment Rating - The report initiates coverage with a "Buy" rating for the company [4]. Core Views - The company has established itself as a domestic leader in the semiconductor equipment sector, particularly in photoresist coating and developing equipment, with a strong growth trajectory in revenue and profit [10][25]. - The semiconductor equipment market is expected to recover in 2024, driven by increasing demand for advanced packaging and domestic production capabilities [22][74]. Summary by Sections Company Overview - The company, founded in 2002, specializes in semiconductor production equipment and has developed a comprehensive product portfolio covering four main business segments: front-end coating and developing equipment, front-end cleaning equipment, back-end advanced packaging equipment, and small-sized devices [10][25]. - In 2023, the company achieved a revenue of 1.717 billion yuan, representing a year-on-year growth of 23.98%, with a net profit of 251 million yuan, also up by 24.98% [10][14]. Financial Data and Valuation - Revenue projections for 2024-2026 are 2.285 billion yuan, 3.033 billion yuan, and 3.916 billion yuan, respectively, with corresponding growth rates of 33% for both 2024 and 2025, and 29% for 2026 [3][90]. - The net profit is expected to reach 301 million yuan in 2024, 469 million yuan in 2025, and 625 million yuan in 2026, with growth rates of 20%, 56%, and 33% respectively [3][90]. - The company’s P/E ratio is projected to decrease from 47.7 in 2024 to 23.0 in 2026, indicating potential valuation upside as earnings grow [3]. Market Dynamics - The global semiconductor equipment market is projected to recover in 2024, with a market size expected to reach 105.3 billion USD, following a decline in 2023 due to weak demand and high inventory levels [22][74]. - The domestic market is anticipated to see significant growth, with local companies gradually breaking the overseas monopoly in key equipment segments [22][74]. Product and Technology Development - The company is the only domestic supplier capable of providing mass production front-end coating and developing machines, having achieved full coverage for 28nm and above process nodes [2][83]. - The introduction of new products, such as the KSCM300/200 front-end single wafer chemical cleaning machine, enhances the company’s product line and market competitiveness [2][61]. - The company is also expanding into advanced packaging and small-sized device sectors, with ongoing development of automated temporary bonding and debonding machines [2][65]. Order Backlog and Future Outlook - The company has a robust order backlog of approximately 2.2 billion yuan as of 2023, which supports future revenue growth [10][45]. - The anticipated growth in advanced packaging and the company’s ongoing R&D investments are expected to drive further revenue increases and market share expansion [3][90].