TFME(SZ:002156) Ping An Securities·2024-04-08 16:00Investment Rating - The report gives a "Buy" rating for Tongfu Microelectronics, marking its first coverage [3][8]. Core Views - Tongfu Microelectronics is positioned as a leading semiconductor packaging and testing service provider, with a strong focus on advanced packaging technologies and deep collaboration with AMD [5][8]. - The company has shown significant revenue growth in recent years, driven by the increasing demand for semiconductor packaging in various sectors, including AI, 5G, and automotive electronics [4][6]. - The report anticipates that the company's net profit will improve significantly in the coming years, benefiting from its advanced packaging technologies and strategic partnerships [8][18]. Summary by Sections Company Overview - Tongfu Microelectronics is a prominent semiconductor packaging and testing service provider, offering comprehensive solutions from design simulation to packaging testing [4][13]. - The company operates seven production bases globally, including locations in Jiangsu, Hefei, Xiamen, Suzhou, and Penang, Malaysia, catering to diverse customer needs across various sectors [4][15]. Financial Performance - The company reported revenues of 107.69 billion, 158.12 billion, 214.29 billion, and 159.07 billion yuan for the years 2020 to the first three quarters of 2023, reflecting year-on-year growth rates of 30.27%, 46.84%, 35.52%, and 3.84% respectively [4][6]. - The forecast for 2023-2025 indicates net profits of 1.73 billion, 11.03 billion, and 22.94 billion yuan, with corresponding EPS of 0.11, 0.73, and 1.51 yuan [8][18]. Advanced Packaging Technology - The report highlights the increasing share of advanced packaging in the semiconductor market, with predictions that it will exceed 50% by 2025 [27][28]. - Tongfu Microelectronics has developed proprietary advanced packaging technologies, including VISionS and 2.5D/3D Chiplet technologies, which are crucial for high-performance computing applications [5][42]. Strategic Partnerships - The company has formed a strong partnership with AMD, becoming its largest packaging and testing supplier, handling over 80% of AMD's orders [5][19]. - This collaboration is expected to enhance Tongfu's competitive edge in the semiconductor industry, particularly in the AI era [5][42].