KINGSEMI(SH:688037) Huachuang Securities·2024-05-01 03:05Investment Rating - The report maintains a "Strong Buy" rating for the company, with a target price of 127.8 CNY [26]. Core Insights - The company experienced steady growth in 2023, with operating revenue reaching 1.717 billion CNY, a year-on-year increase of 23.98%. The gross margin was 42.53%, up by 4.13 percentage points. The net profit attributable to the parent company was 251 million CNY, reflecting a year-on-year growth of 25.21% [25][26]. - In Q1 2024, the company reported a decline in operating revenue to 244 million CNY, down 15.27% year-on-year and 52.16% quarter-on-quarter. The gross margin decreased to 40.30%, a drop of 5.01 percentage points year-on-year [25][26]. - The company is positioned to benefit from the acceleration of domestic substitution in the semiconductor equipment sector, particularly in photoresist coating and developing equipment, where it holds a competitive edge [26]. Financial Summary - 2023 Financials: - Operating Revenue: 1,717 million CNY - Net Profit: 251 million CNY - Gross Margin: 42.53% [25][26] - 2024 Financial Forecast: - Projected Operating Revenue: 2,202 million CNY - Projected Net Profit: 325 million CNY - Projected Gross Margin: 41.6% [31] - Growth Rates: - Operating Revenue Growth Rate: 24.0% for 2023, projected 28.3% for 2024 - Net Profit Growth Rate: 25.2% for 2023, projected 29.7% for 2024 [31][26]. Product Performance - The company achieved significant revenue from its photoresist coating and developing equipment, with sales of 1.066 billion CNY in 2023, marking a 40.80% increase year-on-year. The gross margin for this segment was 38.84% [26]. - The single-wafer wet etching equipment generated 600 million CNY in revenue, a 9.09% increase year-on-year, with a gross margin of 46.37% [26]. Market Position - The company is the only domestic provider of mid-to-high-end mass production photoresist coating and developing equipment, with successful product launches and orders from major domestic clients [26]. - The report highlights the company's ongoing investment in R&D to maintain its competitive edge and expand its product offerings [26].