KINGSEMI(SH:688037) Soochow Securities·2024-04-29 05:00Investment Rating - The report maintains an "Accumulate" rating for the company [1] Core Views - The company achieved steady revenue growth in 2023, with a total revenue of 1.72 billion yuan, representing a year-on-year increase of 24%. The revenue from photolithography coating and developing equipment was 1.07 billion yuan, up 41% year-on-year, accounting for 62% of total revenue [2][12] - In Q1 2024, the company experienced a decline in revenue to 240 million yuan, down 15% year-on-year, primarily due to the order structure and increased employee and share payment costs [2][12] - The gross margin for 2023 improved to 42.5%, an increase of 4.1 percentage points year-on-year, with a net profit margin of 14.6% [3][12] - The company is the only domestic provider of mass production photolithography coating and developing machines, achieving full coverage for 28nm and above process nodes [4][25] - The company has seen a stable order intake, with inventory and contract liabilities slightly increasing quarter-on-quarter [3][22] Summary by Sections Financial Performance - Total revenue for 2023 was 1.72 billion yuan, with a year-on-year growth of 24%. The net profit attributable to shareholders was 250.63 million yuan, up 25% year-on-year [2][12] - The gross margin for 2023 was 42.5%, with a net profit margin of 14.6% [3][12] - For Q1 2024, revenue was 240 million yuan, down 15% year-on-year, and net profit was 20 million yuan, down 76% year-on-year [2][12] Orders and Inventory - As of Q1 2024, the company had contract liabilities of 410 million yuan, down 20% year-on-year but up 10% quarter-on-quarter. Inventory stood at 1.78 billion yuan, up 23% year-on-year [3][22] Growth Potential - The company is positioned to benefit from the domestic substitution of photolithography coating and developing equipment, with significant progress in new product development for cleaning and advanced packaging equipment [4][25] - The company has received verification orders for its new generation high-capacity cleaning machines from major domestic storage clients [4][25] Profit Forecast and Valuation - The report adjusts the profit forecast for 2024 and 2025, estimating net profits of 330 million yuan and 430 million yuan respectively, with a projected net profit of 550 million yuan for 2026. The current market value corresponds to dynamic P/E ratios of 41, 32, and 25 times for the respective years [5][28]