Wanye newly set up Jiaxin Semiconductor equipment subsidiary to build New Semiconductor equipment Development platform [Agency Review]

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Event: December 23, 2021, the company issued an announcement: the company's holding subsidiary, Jiaxin Semiconductor equipment Technology Co., Ltd. (referred to as "Jiaxin Semiconductor"), a subsidiary of the Yangtze River Delta, signed a project investment agreement with the people's Government of Xitang Town, Jiashan County. The project is called "Yangtze River Delta Integrated demonstration Zone (Zhejiang Jiashan) Jiaxin Semiconductor equipment Technology Co., Ltd. produces 2450 sets / sets of new equipment and 50 sets / sets of semiconductor refurbished equipment items per year", which will include 6 subsidiaries and 2 business departments. In the future, the project company is mainly engaged in etching machines, rapid heat treatment, film deposition, monolithic cleaning machines, trough cleaning machines, exhaust gas treatment, mechanical arms and other 8-inch and 12-inch semiconductor new equipment development and production and equipment renovation, the total investment of the project is 2 billion yuan, of which the company's investment will not exceed 800 million yuan.

Comments: the company sets up Jiaxin Semiconductor to realize the leap from ion implanter to semiconductor equipment platform. At present, the company's main semiconductor equipment product is the ion implanter of its subsidiary Kaishitong. The first low-energy large-beam ionon injector has been verified and confirmed in a large domestic 12-inch wafer factory. A low-energy large-beam heavy metal ion implanter and a low-energy large-beam ultra-low temperature ion implanter have been delivered to customers, and the high-energy ion implanter equipment is assembled according to the customer delivery plan. It has signed an order for a low-energy large beam ultra-low temperature ion implanter and a high-energy ion implanter with another 12-inch wafer factory in China, breaking the monopoly position of foreign equipment manufacturers, and is the leading enterprise of the domestic ion implanter. It is also the strategic supplier of SMIC of the domestic head wafer factory, and the ion implanter has entered the release period.

According to the statistics of Huajing Industrial Research Institute, the sales of ion implanters accounted for about 3% of the sales of semiconductor front equipment in 2020, which is relatively small compared with 26.9% of thin film deposition machines, 23.9% of etching machines and 6.7% of cleaning equipment. The company set up a subsidiary Jiaxin semiconductor body on April 29, 2021, with a shareholding ratio of 80%, which is the largest shareholder, while Ningbo Xinen has a shareholding ratio of 20%, which is the second largest shareholder. In the future, Jiaxin Semiconductor will be engaged in the development of new equipment such as thin film deposition machine, etching machine, cleaning equipment and rapid thermal treatment, which can greatly expand the company's growth space in the field of semiconductor equipment in the future. complete the leap from "1-ion injector" to "N-platform: etching machine, thin film deposition machine, cleaning equipment, ion implanter and rapid annealing". The prototype of platform semiconductor equipment company has emerged.

Epitaxial endogenesis helps the company transform the field of integrated circuit core equipment, and the layout is becoming more and more diversified and platform. In recent years, the company has actively transformed the integrated circuit core equipment business from the real estate business by means of "epitaxial mergers and acquisitions, epitaxial growth". In addition to the core product ion implanter, in December 2020, the company led domestic and foreign investors to complete the acquisition of Compart Systems (CS), the world's leading supplier of precision components and flow control solutions in the field of integrated circuit gas delivery systems, with a current shareholding of 33%, and indirectly became the largest shareholder of CS. CS is a core supplier to overseas giants such as applied materials. Its revenue is expected to reach 1 billion yuan in 2021 and will continue to maintain strong growth in 2022. In addition, as the main LP invested by the Shanghai Semiconductor equipment Materials Fund, the company has invested in Huazhuo Jingke, Shanghai Jingshi, Changchuan Technology, Shanghai Yudu, etc., covering the core components of the lithography machine-double workpiece tables, semiconductor front testing equipment, rear testing machines and other core equipment, the company's IC core equipment field layout is becoming more and more diversified and platform.

Profit forecast, valuation and rating: the company is actively transforming the field of integrated circuit core equipment, and its subsidiary Kaishitong ion implanter has made a major breakthrough and is expected to continue to expand. In addition, it has set up Jiaxin Semiconductor to engage in the start-up of new equipment and the acquisition of Compart to complete the layout of equipment core components. We continue to be optimistic about the company's epitaxial endogenous growth prospects. To maintain the company's 2021-2023 return net profit is 384 million yuan, 522 million yuan, 551 million yuan, the current market value of the corresponding PE is 82x, 60x, 57x, maintain the "buy" rating.

Risk hint: customer introduction and verification are not as expected, fab expansion is not as expected, and technology research and development is not as expected.