KINGSEMI(SH:688037) Shanxi Securities·2024-05-08 08:00Investment Rating - The report maintains a "Buy-A" rating for the company, indicating an expected price increase of over 15% relative to the benchmark index [4][16]. Core Insights - The company reported a revenue of 1.717 billion yuan in 2023, a year-on-year increase of 23.98%, and a net profit of 251 million yuan, up 25.21% year-on-year. However, in Q1 2024, revenue decreased by 15.27% year-on-year to 244 million yuan, with a significant drop in net profit by 75.73% year-on-year [16][17]. - The company has a strong order backlog of approximately 2.2 billion yuan, with stable growth in front-end track orders and significant progress in chemical cleaning and advanced packaging equipment [17][18]. - The company has expanded its production capacity with new facilities in Shanghai, aiming for a production capacity of 20-25 billion yuan, and has increased R&D spending by 30.06% year-on-year [18]. Financial Summary - The company’s projected earnings per share (EPS) for 2024, 2025, and 2026 are 2.54 yuan, 3.43 yuan, and 4.39 yuan respectively, with corresponding price-to-earnings (P/E) ratios of 35.9, 26.6, and 20.8 [4][20]. - Revenue is expected to grow from 2.312 billion yuan in 2024 to 4.188 billion yuan in 2026, with a compound annual growth rate (CAGR) of 32% [20]. - The net profit is projected to increase from 350 million yuan in 2024 to 605 million yuan in 2026, reflecting a CAGR of 28.2% [20]. Growth and Profitability Metrics - The company’s gross margin is expected to improve from 44.3% in 2024 to 46.8% in 2026, while the net margin is projected to remain stable around 14.5% to 15.1% [10][20]. - Return on equity (ROE) is forecasted to rise from 12.8% in 2024 to 16.1% in 2026, indicating improved profitability [10][20]. Market Position and Competitive Landscape - The company has maintained a strong market position with a growing domestic market share, particularly in front-end coating and developing equipment [17][18]. - The competitive landscape is intensifying, with challenges in downstream recovery and increased competition impacting growth prospects [5].