Hwatsing Technology (SH:688120) Huachuang Securities·2024-04-29 13:02Investment Rating - The report maintains a "Strong Buy" rating for the company with a target price of 221.7 CNY, compared to the current price of 162.31 CNY [2][6]. Core Insights - The company achieved a revenue of 2.508 billion CNY in 2023, representing a year-over-year increase of 52.11%. The gross margin was 46.02%, and the net profit attributable to shareholders was 724 million CNY, up 44.29% year-over-year [3][6]. - In Q1 2024, the company reported a revenue of 680 million CNY, a year-over-year increase of 10.40% and a quarter-over-quarter increase of 1.88%. The gross margin improved to 47.92% [3][6]. - The company's CMP (Chemical Mechanical Planarization) equipment revenue reached 2.278 billion CNY in 2023, growing by 59.20% year-over-year, while other business segments generated 230 million CNY, up 5.55% [3][6]. - The company is positioned as a leader in the domestic CMP field, with successful penetration into major semiconductor manufacturers, enhancing its market share [3][6]. Financial Performance Summary - The company forecasts revenues of 3.632 billion CNY, 4.694 billion CNY, and 5.534 billion CNY for 2024, 2025, and 2026, respectively, with net profits projected at 1.007 billion CNY, 1.309 billion CNY, and 1.562 billion CNY [6][7]. - The earnings per share (EPS) are expected to be 6.33 CNY, 8.23 CNY, and 9.83 CNY for the years 2024, 2025, and 2026, respectively [6][7]. - The company has demonstrated strong cost management, with a decrease in expense ratios across the board, while increasing R&D and capital expenditures to support long-term growth [3][6]. Product Development and Market Position - The company is advancing its product iterations, with new CMP equipment expected to enter mass production in 2024 and ongoing development of third-generation semiconductor models [3][6]. - The company has successfully secured bulk orders for its wafer regeneration business, achieving a production capacity of 100,000 wafers per month [3][6]. - The diversification of key consumables, such as polishing pads, is progressing well in large-scale production lines [6][8].