#我的宝藏头条作者#
Author: Big Brother, Editor: Xiao Shimei
A round of volume surge in A-shares that began at the end of September has brought some high-capitalization growth stocks with previously depressed stock prices and excellent performance back to the market's attention.
For example, the domestic "king of semiconductor equipment" North Huachuang, the stock price once soared by 60%, and the market value approached 250 billion, only one step away from the record high.
Although with the recent overall pullback, North Huachuang has also begun to adjust, but gold, there is always a time to be discovered.
【The King of Growth】
The strong strength of NAURA can be seen from the financial results.
In the first half of 2024, the company's revenue will be 12.3 billion, ranking third among the 156 A-share semiconductor companies, with a net profit of 2.781 billion, which is far ahead in the industry, and SMIC, which ranks second, has a net profit of only about 1.6 billion.
Growth that is more important than the scale of performance, NAURA has also performed extremely well.
In the first half of this year, NAURA achieved a growth of more than 40% in revenue and net profit, and its net profit increased to 4.130 billion yuan to 4.750 billion yuan, with a growth rate of 43.19% to 64.69%.
In the long run, NAURA has become even more explosive in terms of performance growth. As a leading semiconductor equipment company in China, the company's revenue has increased by 23 times since 2015, with an annualized compound growth rate of more than 40%, and its net profit has increased by nearly 100 times, with an annualized compound growth rate of more than 60%.
▲ Source: Straight flush
Looking at the A-share market, there are not many companies that can achieve such growth in 9 years, accounting for no more than 1%, and the performance of listed companies is the same as investment income.
The strength of NAURA is also reflected in the stability behind its high growth. In the past 9 years, the net profit growth rate of NAURA has never been lower than 30%, and the revenue growth rate has not been lower than 20%.
It is extremely difficult to achieve high growth with a high degree of stability, just like a basketball game where an average of 30 points per game and dozens of consecutive games are completely different concepts.
In fact, it is very common for a year's net profit to grow by more than 30%, such as technology or cyclical companies, with greater performance elasticity, and in the early stage of industry development or business cycle, performance is prone to a phased explosive rise.
However, if you extend the time, you will find that it is extremely rare in the A-share market to maintain long-term sustained high growth.
According to the data of Flush Money, among the more than 5,000 A-share companies, only 85 have a positive net profit and a growth rate of more than 30% for 3 consecutive years, only 13 have a net profit growth rate of more than 30% for 5 consecutive years, and only 2 have exceeded 30% for 7 consecutive years.
The company with a net profit growth rate of more than 30% for nine consecutive years is the only one in NAURA Huachuang, which is unique in the A-share market.
After experiencing the business cycle from 2019 to 2021, the semiconductor industry will fall into deep adjustment in 2023, and many leading companies in the industry at home and abroad will not be able to avoid the performance fluctuations caused by the replacement of the industry cycle.
Take SMIC, the first leading company in China, as an example. In the last round of industry boom cycle, the company's performance has risen sharply, of which net profit has increased by more than 100% for three consecutive years from 2019 to 2021, with extremely strong performance; However, in 2023, when semiconductors are declining, the company's performance will also be unable to escape the curse of the cycle, with net profit falling by 60% and revenue falling by 8.61%.
Samsung Semiconductor, the king of global chips, performed even worse. In 2022, Samsung Semiconductor will still make a profit of 23.8 trillion won (about 128 billion yuan), but in 2023, it will suffer a huge loss, with a cumulative loss of 14.9 trillion won (about 80.1 billion yuan).
In the cold winter of the industry, NAURA still maintains rapid growth in performance, which shows the background color of the king of growth.
【Hope in the Village】
The development process of NAURA can be called the epitome of internal integration and self-reliance in China's electronics industry.
The predecessor of the company was Qixing Huachuang Group, which was jointly established by a number of semiconductor state-owned enterprises in 2021, and in 2017, Qixing Huachuang and another important semiconductor state-owned enterprise, North Microelectronics, were strategically reorganized and officially renamed North Huachuang.
North Huachuang, which has been endowed with many countries' top resources, naturally shoulders the important task of revitalizing the domestic semiconductor industry.
China is the world's largest semiconductor market, but the development of the domestic industry and the international advanced level are quite different, for a long time, semiconductors are China's largest import goods, 90% of the chips need to be imported from abroad.
▲Data source: General Administration of Customs, Dongguan Securities Research Institute
An important factor restricting the independence and controllability of China's chips is semiconductor equipment.
The chip manufacturing process is particularly complex, from silicon wafers to chip semi-finished products, it needs to go through a series of complex processes such as etching, oxidation, thin film deposition, lithography, cleaning, etching
The global semiconductor equipment market has long been divided by United States, Japan and European companies, and the competitiveness of China's semiconductor equipment is extremely low.
For example, thin film deposition equipment mainly includes CVD, PVD, ALD three, basically has been AMAT (United States Applied Materials), Lam Research (Ram Research) with TEL (Tokyo Electron) three monopoly, etching machine is also the world of these three giants, the two main areas of CR3 accounted for more than 60%.
Not to mention the most technically difficult lithography machines, almost all of them come from ASML, Nikon and Canon, of which ASML has the exclusive market for high-end lithography machines and has no competitors in the world. The lithography machine produced by Shanghai Microelectronics, a leading domestic company, can only produce 28-nanometer chips, while ASML has reached the level of several nanometers.
In recent years, Chinese semiconductor equipment companies have begun to catch up. As the national team, NAURA has become the banner bearer of domestic substitution, and has almost achieved the head position in almost all high-value fields except lithography machines.
In the field of thin film deposition equipment, NAURA and Tuojing Technology are domestic leaders, but Tuojing Technology mainly does CVD and ALD, while NAURA has a product line covering the whole field of CVD, PVD and ALD, and has achieved a breakthrough in 28nm/14nm technology, with a market share of more than 20% in domestic equipment, which is a well-deserved first leader.
Etching machine is the most advantageous semiconductor equipment field in the mainland, and the two leading companies of North Huachuang and China Micro have an increasing impact on foreign brands. AMEC's dielectric etching machine has significant advantages and has entered TSMC's 5nm production line; NAURA is more advanced in the field of ICP etching, and has entered the verification stage of SMIC's 14nm production line.
At present, NAURA has a global market share of 1.7%, ranking seventh, and ranking among the top five in the domestic etching equipment market share, second only to AMEC.
With the platform advantages brought by the comprehensive layout, the performance scale of NAURA far exceeds that of other participants in the industry, and the second-ranked micro company has less than one-third of the revenue and less than half of the net profit. According to the revenue ranking in 2023, NAURA is currently the eighth largest semiconductor equipment company in the world, which is the first time that a Chinese manufacturer has entered the top 10 in the global industry.
Although domestic manufacturers have made significant progress, the localization rate of semiconductor equipment is still very low. According to data from Xinmou Research, in 2023, the size of China's semiconductor equipment market will be US$34.2 billion, of which US$4 billion will be local equipment, accounting for only 11.7%.
NAURA has the most complete product line and the strongest comprehensive strength, and is undoubtedly the most anticipated company in the wave of domestic substitution of semiconductor equipment.
【A Shares Missing】
Although the performance has exploded, and it carries the expectations of scientific and technological self-improvement and independent controllability, NAURA has not been welcomed in the capital market in recent years. The hot spots of the market, in addition to the endless hype hot spots, are mainly in the dividend stocks of traditional industries such as coal and electricity.
NAURA is obviously not a model of high dividends. Since its listing in 2010, the company has issued 5 additional issuances, with a cumulative net fund-raising amount of 12.966 billion yuan and a dividend of less than 1 billion yuan, and the dividend rate and dividend yield are far lower than those of traditional industry leaders.
In fact, NAURA has not had sufficient cash flow, which has continued to increase its performance. The high growth of emerging industries is often accompanied by high capital expenditures, and the company's net operating cash flow is in a state of net outflow all year round, and the demand for capital is still very hungry.
The company's latest additional issuance appeared in November 2021, raising a total of nearly 8.5 billion yuan, of which nearly 1.5 billion yuan was subscribed by the second phase of the National Integrated Circuit Industry Investment Fund. At present, the National Integrated Circuit Industry Investment Fund holds 28.73 million shares of NAURA Huachuang, accounting for 5.42%, and is the third largest shareholder of the company, with a market value of nearly 10 billion yuan.
The endorsement of state funds has not brought a valuation premium to NAURA Huachuang, and the company's PE is only about 40 times, which is not ideal compared to the annualized compound growth rate of net profit of more than 60%.
In contrast, many traditional industry dividend stocks, performance almost stopped growing, high dividends are just a financial technique to maintain a higher ROE, but can get a valuation level much higher than the performance growth, investors seem to forget that continuous growth is the real investment value of enterprises.
Objectively speaking, the low valuation of growth white horse stocks and the high valuation of stagnant dividend stocks largely come from the defensive strategy of investors during the economic downturn.
After experiencing the downward cycle and capacity reduction in the past two years, the decline in the global semiconductor industry will gradually narrow in the second half of 2023, and 2024 will undoubtedly be at an important juncture in a new round of cycle transformation. In particular, under the catalysis of artificial intelligence, the latest quarterly performance of leading semiconductor companies represented by Nvidia and Samsung has skyrocketed, further confirming that the pace of industry recovery is getting closer and closer.
The recovery of downstream demand means a significant increase in capital expenditure centered on equipment. According to the semiconductor association SEMI, China will add 18 new wafer fabs in 2024, with production capacity increasing from 7.6 million to 8.6 million pieces, and the total capital expenditure of domestic chip companies is expected to increase by 17.7% year-on-year to $29.5 billion.
Standing at the starting point of a new round of upward cycle, the semiconductor industry, which is at a low valuation as a whole, is likely to regain market attention, and the real growth king of A-shares may no longer be buried by the capital market.
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The content of this article related to listed companies is the author's personal analysis and judgment based on the information publicly disclosed by listed companies in accordance with their legal obligations (including but not limited to temporary announcements, periodic reports and official interactive platforms, etc.); The information or opinions contained herein do not constitute any investment or other business advice, and Market CapWatch disclaims any liability for any actions resulting from the adoption of this article.
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