KINGSEMI(688037) 华兴证券·2025-05-20 11:26Investment Rating - The report maintains a "Hold" rating for the company with a target price slightly adjusted to RMB 90.00 from RMB 95.00 [3][15][8] Core Views - The company's revenue for 1Q25 was below expectations, but new orders signed in 2024 are expected to contribute to revenue in 2025 [2][8] - The decline in net profit growth compared to revenue growth is attributed to ongoing investments in new product research and development [1][9] - The acquisition of shares by Northern Huachuang is anticipated to positively impact the company's financial performance in the medium to long term [2][15] Summary by Sections Financial Performance - In 2024, the company reported revenue of RMB 1.75 billion, a year-on-year increase of 2.13%, with a net profit of RMB 203 million, down 19.08% year-on-year [1][10] - For 1Q25, revenue was RMB 275 million, a 12.74% increase year-on-year, but net profit fell to RMB 5 million, a 70.89% decrease year-on-year [1][10] Order and Product Development - The company signed new orders worth RMB 2.4 billion in 2024, a 10% increase year-on-year, with strong performance in various product lines including photoresist coating and developing machines [2][8] - New products such as the front-end chemical cleaning machine and physical cleaning machine have received significant orders from major domestic clients [2][8] Earnings Forecast Adjustments - The earnings per share (EPS) forecast for 2025 has been reduced by 32% to RMB 1.29 due to lower-than-expected net profit in 1Q25 and increased R&D expenses [3][11] - Revenue projections for 2025, 2026, and 2027 are expected to grow by 29%, 30%, and 24% respectively, with net profit margins improving over the years [9][11] Valuation - The current valuation is set at 69 times the 2025 P/E ratio, reflecting market expectations regarding the acquisition by Northern Huachuang and its potential benefits for revenue and profit growth [3][15] - The company is projected to achieve a net profit growth rate of 46% from 2024 to 2027, which is higher than the industry average of 37% [15][16]