North China Huachuang: Net profit in 2020 is 460-580 million yuan, up 48.85%-87.68% year-on-year

On January 24, North Huachuang released its 2020 performance forecast, with net profit attributable to shareholders of listed companies ranging from 460 million yuan to 580 million yuan, a year-on-year increase of 48.85% to 87.68%.

According to North Huachuang, in 2020, the company's main business had strong demand from downstream customers. At the same time, the company actively responded to the impact of the COVID-19 epidemic and resumed work and production in a timely manner, allowing the company's production operations and order delivery to proceed normally. During the reporting period, the company's sales revenue of electronic process equipment and electronic components increased year-on-year, resulting in an increase in net profit attributable to shareholders of the listed company.

According to Huachuang Securities in its research report, the HiSilicon and SMIC incidents highlight the important strategic significance of localization of semiconductor equipment, and domestic customers have a strong willingness to purchase. The HiSilicon and SMIC incidents highlight the important strategic position of semiconductor equipment, and downstream customers have a strong willingness to purchase domestic equipment and actively cooperate with product verification and introduction. At present, the new expansion of production capacity for mature processes continues to increase the proportion of domestic equipment procurement, and key process equipment such as 28/40nm is also in the production line verification stage, and is expected to achieve significant breakthroughs. With the continued expansion of downstream customers and the research and development and verification of advanced process equipment, the share of domestic semiconductor equipment manufacturers is expected to continue to expand.

The expansion of mature process production has led to rapid growth in orders, and the verification of advanced process equipment is expected to bring new business growth to the company. One of the core logics behind this supply and demand tension is the rapid growth in demand for mature processes in fields such as 5G and new energy. Power semiconductors/MCU/driver ICs and other fields are in short supply. Mature process production lines have relatively low requirements for equipment, and domestic equipment manufacturers are expected to occupy a larger share. North Huachuang has a wide range of product categories and has strong product competitiveness in key process links. At the same time, advanced process equipment is in the verification stage in key large clients. The increase in demand for mature processes and customer breakthroughs in advanced process equipment are expected to significantly drive the company's performance growth.