2021-11-01 Anxin Securities Co., Ltd. Ma Liang, Zhang Wangqiang and Guo Wang studied Jacques Technology and issued a research report entitled "purchase Integration to build a Semiconductor material platform, all Business Trends are good". This report gives a buy rating to Jacques technology. it is believed that its target price is 91.14 yuan, and the current share price is 76.8 yuan, with an expected increase of 18.67%.
Jacques Technology (002409)
Event: on October 28, 2021, the company released its third-quarter performance report for 2021. In the first three quarters, the company achieved operating income of 2.692 billion yuan, an increase of 59.73% over the same period last year, and a net profit of 390 million yuan, an increase of 13.26% over the same period last year.
The consolidated table led to a big increase in revenue, and all businesses performed well: the company's revenue in the first three quarters increased by nearly 60% compared with the same period last year, and its net profit increased by nearly 13% compared with the same period last year. The main reasons for the surge in revenue include the inclusion of Cotem in the merger since September 2020 and the good performance of other businesses. At 2021H1, the company's semiconductor precursor materials business achieved revenue of 370 million yuan (YoY+5.5%), electronic special gas business revenue of 190 million yuan (YoY+16.6%), and photoresist and supporting reagent business revenue of 570 million yuan (from the acquisition of Cotem). In addition, the company's flame retardants and LNG were affected by the epidemic last year, resulting in low revenue, and this year's pick-up in demand led to a year-on-year increase in revenue. Judging from the single quarter of Q3, Q3 realized operating income of 889 million yuan, an increase of 17.48% over the same period last year, which was nearly flat compared with the same period last year. The net profit of homing was 148 million yuan, up 10.95% from the same period last year, and 23.33% from the previous year.
Downstream production expansion leads to the growth of material demand, and the prospect of domestic replacement of semiconductor precursor / SOD is promising: SOD and precursor are important materials for chip manufacturing. Driven by the high prosperity of the semiconductor market, wafer factories expand production one after another, leading to the growth of upstream material demand. In addition, the advance of advanced processes will also increase the value of SOD and precursors. According to Fuji economic data, the global precursor market is expected to reach US $2.021 billion in 2024, with a CAGR of 5.3 per cent in 2020-2024. The company has entered the semiconductor SOD and precursor market through the acquisition of South Korean UPChemical. In SOD, only Germany's Merck, Samsung SDI and Jacques have the semiconductor SOD supply capacity, and the company is the only domestic supplier. In terms of semiconductor precursors, the global market is basically monopolized by overseas companies such as German Merck and French liquid Hollow, and the company is the only domestic manufacturer in China. In addition to deepening cooperation with Samsung and Hynix, it has also opened up domestic customers such as Semiconductor Manufacturing International Corporation, Huahong Hongli, Changjiang Storage, Hefei Changxin, and jointly developed high-k precursor materials for 3nm and other advanced nodes with global contract manufacturers.
There is a broad space for domestic replacement of panel photoresist, and the introduction of the company's customers is advancing smoothly: according to the data of China Optooptoelectronics Industry Association, the production capacity of Chinese mainland panel accounts for about 55% of the world in 2020, and it is still in a state of continuous improvement. The proportion of mainland panel production capacity continues to drive the demand for domestic substitution of upstream raw materials. Photoresist is one of the core raw materials upstream of the panel. According to Fuji economic data, the global panel photoresist market is worth 2.36 billion US dollars in 2020. At present, the market is basically monopolized by Japan and South Korea, and there is a broad space for domestic substitution. The company entered the photoresist field through the acquisition of Cotem and LG chemical assets, the products are mainly used in high-generation LCD display and OLED display, sales to South Korean customers such as LG display remain stable, and have been introduced into the supply chain of Huaxing Optoelectronics, Huike, Tianma, BOE and other mainstream display panel manufacturers, the newly developed OLED display photoresist has begun to supply the Apple Inc electronics production line of LG display.
Investment suggestion: the company's income from 2021 to 2023 is expected to be 3.466 billion yuan, 4.607 billion yuan and 6.077 billion yuan respectively, the net profit of returning to the mother is 627 million yuan, 849 million yuan and 1.153 billion yuan respectively, and the EPS is 1.32,1.79 yuan and 2.42 yuan respectively, maintaining the "buy-A" investment rating.
Risk tips: downstream demand is not as expected, product development is not as expected, and customer expansion is not as expected.
A total of 12 agencies have rated the stock in the last 90 days, including 7 buy ratings and 5 overweight ratings; the average institutional target price in the past 90 days is 119.15; according to the Securities Star valuation analysis tool, the good company of Jacques Technology (002409) has a rating of 3 stars, a good price rating of 2 stars and a comprehensive valuation rating of 2.5 stars.
