China Micro 杭州桑拿 Corporation (688012): MOCVD and Etching Machine Dual Drives Create Leading Domestic Equipment

Investment points: The rising star of global semiconductor equipment, focusing on the dual layout of etching equipment + MOCVD.

Founded in 2004, China Micro has become one of the top five suppliers of semiconductor etching equipment worldwide.

Since 2010, it has cut into the field of MOCVD. By 2018, the global market for GaN-based LEDs for MOCVD will increase 41% of the market. In 2018, the proportion of H2 will reach 60%.

The company’s core management team is stable, with decades of industry experience including co-founders, core technical staff and senior management teams.

China Microelectronics has made breakthroughs in MOCVD technology and grasped key strategies for domestic substitution.

Technical restrictions and market promotion are the main barriers in the process of domestic substitution.

The key performance indicators of Chinese and micro products have reached the international level, and the core technology has been independently researched and developed with patent protection.

Since 2017, the company has received large-scale batch orders from leading domestic LED manufacturers, breaking the monopoly pattern of the MOCVD market in one fell swoop.

After the technical differences gradually narrowed, after-sales operation and maintenance capabilities became a key consideration for customers.

Etching equipment has a high prosperity and a wide space for localization.

The self-sufficiency rate of domestic integrated circuit equipment is about 5%, accounting for only 1-2% of the global market. Import dependence is serious, and localization is urgent.

Etching equipment is one of the most important equipment in the integrated circuit manufacturing process, accounting for about 24% of the wafer manufacturing value.

The trend of miniaturization of integrated circuit line width and 3D structure has led to higher requirements for the accuracy and repeatability of etching technology, and the proportion of equipment investment has continued to increase.

Micro-etching equipment has international competitiveness, and the monopoly pattern is gradually breaking through.

The etching equipment industry is highly concentrated, and technical barriers are obvious.

In 2017, the etching equipment market CR3 was as high as 94%.

Microelectronic equipment has international competitiveness in core indicators such as production efficiency per unit time, key dimensional stability, uniformity, and particle pollution rate.

Major customers include TSMC, SMIC, UMC and other international first-tier manufacturers.

The gross profit margin of the equipment is similar to that of international benchmarking companies, which is the best verification of product competitiveness.

Dielectric etching equipment has been working on TSMC’s 7nm and 10nm advanced process production lines, and at the same time joint 5nm certification.

As the competitiveness of our products continues to be verified by customers, we are optimistic that the company will continue to make breakthroughs in the localization of etching equipment in the future.

Using PS estimates, we research and judge the company’s target market value of 16.2 billion.

Select comparable companies Northern Huachuang, Shanghai Xinyang, alternative companies of the company’s semiconductor equipment companies, have the most customers in MOCVD, continue to make breakthroughs in etching machines, enjoy the leading premium estimates, we select comparable companies to correspond to the average PS in 2019 as8.

9 times.

Considering that China Micro’s etching machine and MOCVD have better customer and product bargaining power than comparable companies, giving the company 11 times the PS in 2019, the company’s target market value is 162 trillion, which corresponds to a reasonable lead of the total share capital after the issuance.Is 30.

29 yuan.

New stock premium effect: According to historical data statistics, new stocks 30 days before listing have obvious premium characteristics. According to comparable industry statistics: the premium rate is 2% -34%, so the company’s possible initial fluctuation period is 30.


59 yuan risk warning: LED downstream demand is stagnant, R & D risks.

Special Note: The pricing of the new stocks predicted in this report is not the price performance on the first day of listing, and in addition, the existing market environment is basically the same as the reasonable price range.