2Q23 net profit +73% YoY in line; Arms race still good for equipment makers_股票频道

（以下内容从招银国际《2Q23 net profit +73% YoY in line; Arms race still good for equipment makers》研报附件原文摘录）
晶盛机电(300316)
Zhejiang Jingsheng (JSG)’s net profit in 1H23 surged 83% YoY to RMB2.2bn,in line with the pre-announced profit released in mid-Jul. Net profit in 2Q23 grew73% YoY to RMB1.3bn, a record high. As of end-Jun 23, total backlog reachedRMB27.8bn (solar/semiconductor: 88%/12%), which continues to offer visibilityover the coming 18 months. We maintain our TP at RMB106, based on 32x2023E P/E, on the back of 32% earnings CAGR in 2023E-24E. While the solarsector has been under pressure, we expect equipment makers will outperformother segments in the supply chain due to the arms race to expand and upgradecapacity. Upcoming catalysts include: (1) new orders on solar cell & moduleequipment; and (2) spin-off of crucible business unit.
1H23 results: Explosive growth of materials segment. Revenue grew92% YoY to RMB8.4bn in 1H23. By segment, equipment revenue (solar +semiconductor) grew 71% YoY RMB6.1bn. Materials revenue (crucibles,diamond wire saw & sapphire) surged 2.4x YoY and 1x HoH to RMB1.88bn.Materials gross margin sharply expanded by 27.3ppt YoY to 54.7%, whichmore than offset the 2.4ppt contraction of equipment segment (to 40.1%).Blended gross margin therefore expanded 2.7ppt YoY to 42.7%.Administrative expense ratio dropped 1ppt YoY to only 2% in 1H23. R&Dexpense ratio increased 0.8ppt YoY to 7.1% which we believe is essentialgiven JSG’s continuous development of new technology. In 1H23, JSGrecognized RMB70mn of fair value gain (1H22: nil). Operating cash inflowreached RMB1bn in 1H23, a strong recovery from an outflow of ~RMB52mnin 1H22.
Key highlights of 2Q23 results. Revenue surged 99% YoY to RMB4.8bn.Gross margin expanded 4.2ppt YoY and 3.6ppt HoH to 44.2%, driven bythe ASP hike of materials segment. Minority interest surged 12x YoY toRMB208mn due to the strong growth of non-wholly owned materialbusiness. Net profit grew 73% YoY to RMB1.3bn.
Strong pricing power reflected in the growth of customers’downpayment. As at end Jun 2023, contract liabilities (an indicator ofdown-payment from customers) surged 49% YoY to RMB10.4bn.
Risks: 1) Slowdown in solar power capex; 2) lower-than-expected grossmargin; (3) decline in crucible price.