Huate Gas(SH:688268) CHINA DRAGON SECURITIES·2024-04-24 01:00Investment Rating - The report assigns a "Buy" rating for the company, marking the first coverage of the stock [7]. Core Views - The company is expected to benefit from the domestic substitution trend in the semiconductor industry, with significant progress in new product development. The global semiconductor equipment investment is projected to rebound in 2024, which will positively impact related industries [1]. - The company has increased its R&D investment, with an R&D expense ratio of 3.36% in 2023, up by 0.03 percentage points from 2022. This is part of a strategy to enhance core competitiveness through industry chain extension and mergers and acquisitions [1]. - The company completed its convertible bond issuance, which will enhance its product line supply capacity as new projects gradually come online [1]. - The company announced a dividend payout ratio of 35.03% for 2023, which is expected to increase to 46.62% when considering the share repurchase plan [1]. Financial Performance Summary - In 2023, the company reported a revenue of 1.5 billion yuan, a year-on-year decrease of 16.8%. The net profit attributable to shareholders was 171 million yuan, down 17.18% year-on-year [7][16]. - The report forecasts the company's net profit for 2024-2026 to be 231 million yuan, 292 million yuan, and 370 million yuan, respectively, with corresponding P/E ratios of 23.23, 18.37, and 14.52 [7][18]. - The company’s return on equity (ROE) is projected to improve from 9.38% in 2023 to 13.69% in 2026 [18].