According to the World Semiconductor Trade Association (WSTS), the global semiconductor market size will be US$520 billion in 2023, down 9.4% year-on-year. This shows that the semiconductor industry was in a state of short-term overcapacity before, and the market prosperity continued to decline.
In the recent situation of frequent price increases in the semiconductor industry, many professionals guess that the semiconductor industry may bottom out, and the spring of the industry is coming.
In recent years, many chip packaging and testing companies have issued a "Price Adjustment Notice", and the price of the packaging and testing end will be increased by 10%~20%, and this price has been implemented in January this year.
If the price of the semiconductor packaging and testing industry can rise, it will undoubtedly be a good thing for the companies in the track. Today, the financial report translator will introduce you to the world's third largest and China's largest chip packaging and testing leader, which is JCET.
After analyzing the company's financial report, the translator found that the company's management may have predicted in advance that the price of the semiconductor packaging and testing industry would rise, so during the reporting period, it not only expanded production, increased the number of inventories, but also expanded production capacity, which are favorable guarantees for its future net profit growth.
At present, the company has four packaging and testing production projects under construction, and the estimated total investment of these projects is close to 17 billion yuan.
After comparing with the company's existing production capacity, the translator found that if these projects under construction can be completed, the company's production capacity, that is, the ability to provide chip packaging and testing, will be increased by about 1 times.
However, through further analysis, the translator also found that the average progress of the company's projects was only 16%, which means that the follow-up management needs to invest 14 billion yuan before these projects can be successfully completed.
During the reporting period, the total amount of cash that the company could take out in the short term, that is, monetary funds, was 9.977 billion yuan, an increase of 201% year-on-year; Transactional financial assets, that is, wealth management purchased with idle funds, were 1.752 billion yuan.
This shows that the company currently has 11.7 billion yuan of funds to use, but there is still a funding gap of 2.3 billion yuan between it and the estimated total investment of these projects under construction.
After further analysis, the translator found that the reason for the sharp increase in the company's monetary funds was that the management borrowed a lot of loans during the reporting period. All of this demonstrates management's determination to expand production capacity, and if management continues to borrow money at a later stage, these projects under construction can be successfully completed.
After looking at the company's production capacity under construction, let's analyze the company's expansion of production again.
In the first quarter of 2023, the company's inventory was only 2.636 billion yuan. By the first quarter of 2024, the company's inventory reached 3.22 billion yuan, a year-on-year increase of 22%.
There are two possibilities for the growth of inventory, one is that the management has received orders from customers before, and the other is that the management believes that the future of the semiconductor packaging and testing industry will play a role, so it has expanded production in advance.
Whatever the reason, in the case of the price rise at the end of the packaging and testing end, the growth of inventory is very beneficial to this company, which will significantly increase the company's net profit in the second quarter of this year.
After looking at the production situation of this company, let's analyze the company's net profit performance in the first quarter of this year.
In 2023, the company's net profit will be 1.47 billion yuan, a year-on-year decrease of 54%.
In 2024, the company will complete a net profit of 135 million yuan in just one quarter, a year-on-year increase of 23%.
This net profit ranks 22nd among the 177 listed companies in the semiconductor sector, which is relatively high, indicating that its scale is relatively large.
Since the company's net profit was cut in half last year, but this year's net profit has risen, the translator speculates that the rise in the price of the chip packaging and testing end has played a role.
Compared with the rise in the company's net profit, the biggest highlight of this company is its super cash flow ability.
In the first quarter of 2024, the company's net profit is only 135 million yuan. However, in the same period, the actual net cash received by this company for providing chip packaging and testing services was as high as 1.373 billion yuan, an increase of 11% year-on-year.
The net cash received from the provision of services was higher than the net profit, and there was also an increase year-on-year, which indicates that the company's cash flow capacity has improved compared with the same period last year, and the cash in its account has also increased, which is very beneficial to the company's production and operation.
At the end of this article, let's analyze the company's price-to-earnings ratio and price-to-book ratio and determine the company's valuation.
In the first quarter of 2024, the company traded at a price-to-earnings ratio of 87x. This shows that if the management distributes the profits earned through the chip packaging and testing service to the shareholders every year, it will take 87 years for the shareholders to return to their capital.
The company's current price-earnings ratio ranks 77th among the 177 listed companies in the semiconductor sector from low to high. This ranking is not low, indicating that its valuation is relatively not high.
After looking at the price-to-earnings ratio of this company above, let's analyze the company's price-to-book ratio.
In the first quarter of 2024, the company traded at a price-to-book ratio of 1.8x, which means that the company's current market price is 1.8x its cost.
The company's current price-to-book ratio ranks 27th among the 177 listed companies in the semiconductor sector from low to high. This is a high position, indicating that its valuation is relatively low.
Through the above analysis, we understand that in 2024, due to the increase in the price of semiconductor packaging and testing, not only will the company's net profit increase, but its cash flow will be very abundant.
At the same time, the management also took advantage of the trend to expand production and increase production capacity, so the growth of this company's net profit this year will be a high probability event.
Since the company's price-to-earnings ratio and price-to-book ratio are relatively high, the translator believes that the company's valuation is relatively low, and it has growth potential in the future.
However, there is one thing that we need to pay attention to, that is, the recent transaction amount of this company has not been enlarged, which means that it has not received attention, and we need to observe further.
If the fundamentals of a listed company are divided into five levels: A, B, C, D, and E from high to low, the translator personally believes that the company can maintain a B level.
Please note: companies with good earnings reports do not necessarily rise. But those companies that can continue to rise sharply must have excellent financial reports.
This article is a pure financial report analysis article, and it is not intended to be recommended, and I hope you can refer to it carefully.