KFMI(300666) Huafu Securities·2024-10-25 00:30Investment Rating - The report assigns a "Buy" rating for Jiangfeng Electronics, marking its first coverage with a current price of 69.30 yuan [1]. Core Insights - Jiangfeng Electronics has established itself as a global leader in ultra-pure sputtering targets, with strong growth in semiconductor components. The company has been deeply rooted in the ultra-pure metal sputtering target industry for nearly two decades and has expanded its business into semiconductor precision components, showcasing robust growth momentum. The company serves major clients such as TSMC, SMIC, and SK Hynix, and has demonstrated strong revenue growth and profitability since 2018, with 2023 revenue reaching 2.602 billion yuan, a year-on-year increase of 11.89% [1][2][3]. Summary by Sections Company Overview - Jiangfeng Electronics specializes in ultra-pure metal materials and sputtering targets for semiconductor manufacturing, with a development history divided into three phases: resource accumulation, market expansion, and accelerated growth [5][6]. Sputtering Targets - The ultra-pure metal sputtering target market is vast, with Jiangfeng Electronics holding the largest market share in China and the second globally. The company has established a complete industrial chain from metal purification to final product, achieving international advanced standards in product purity [6][12]. Semiconductor Components - The semiconductor component business is rapidly developing, with significant growth in precision components such as gas distribution heads and Si electrodes. This segment is expected to fill domestic gaps and drive revenue growth, marking a new growth curve for the company [2][12]. Financial Performance - Revenue and net profit have shown steady growth, with 2023 revenue at 2.602 billion yuan and net profit at 255 million yuan. The company anticipates continued growth in 2024, with a projected revenue increase of 29% and net profit of 351 million yuan [2][9][12]. Research and Development - Jiangfeng Electronics has increased its R&D investment significantly, with 2023 R&D expenses reaching 172 million yuan, a 39.03% year-on-year increase. The company holds 827 domestic patents and is focused on developing advanced materials to enhance its competitive edge [14][18]. Supply Chain Management - The company has implemented diversified supply chain management measures, establishing a stable and secure supply chain through vertical integration and strategic investments. This has enhanced its market competitiveness and enabled it to meet diverse customer needs [16][18].