bigbassbonanzamegawaysfreeslot| Net profit in the first quarter increased year-on-year by nearly 160% year-on-year, and the industry returned to the growth track

Liu Junling, a reporter from the Securities Times

The first quarter of this yearBigbassbonanzamegawaysfreeslotThe closed testing industry ushered in a performance inflection point, and the industry as a whole achieved operating income of 175Bigbassbonanzamegawaysfreeslot9.2 billion yuan, an increase of 20.69 percent over the same period last year, and the net profit of returning home was 399 million yuan, a big increase of 159.66 percent over the same period last year. The closed testing industry has seen its profits decline for two consecutive years since 2022 and is expected to return to growth this year.

The first quarter results are good.

According to statistics from the Securities Times data Bao, among the 13 A-share companies listed in the integrated circuit closed test plate, five reported a year-on-year increase in net profit, one turned a loss into a profit, and two reduced losses, and the overall proportion of good news reached 61.54%.

The performance of the closed test plate has increased significantly, mainly driven by two leading companies, Changdian Technology and Tongfu Micro Power. Changdian's revenue in the first quarter of this year increased by 16.75% compared with the same period last year, and its net profit increased by 23.01% compared with the same period last year. The company's revenue fell 12.15% in 2023, and its net profit fell 54.48%. After five consecutive quarters of decline, the company reported its first quarter-on-quarter increase in the first quarter this year.

Tong Fu Weidian's performance was even brighter in the first quarter, with revenue growing by nearly 14% year-on-year and net profit growing by more than 20 times. In 2022 and 2023, the company's net profit fell sharply for two consecutive years compared with the same period last year. In 2024, according to the market and customer demand, the company plans to increase mass production and R & D in intelligent terminals, automotive electronics, security monitoring, display drivers, storage, high-end servers, AIPC and other product areas, according to the recent investor research activities. The company's annual revenue target is 25.28 billion yuan, an increase of 13.52% over 2023.

In the companies that reported a year-on-year increase in net profit in the first quarter, the net profit of Luzhong Science and Technology and Huicheng shares in 2023 also increased compared with the same period last year. According to the Yazhong Science and Technology Annual report, the home net profit was 372 million yuan, an increase of 22.59% over the same period last year. The company continues to strengthen its core competence in the field of advanced packaging and testing, continuously improve the technical level, expand product applications, and reduce production costs. Improve daily operational efficiency, actively respond to the challenges brought by macroeconomic fluctuations, and maintain a strong market competitiveness.

In terms of stock price performance, most individual stocks in the closed test sector have fallen back so far this year, with an average cumulative decline of 22.56%, while majestic Technology, Hualing shares, Blue Arrow Electronics, and Weizhao Technology have dropped more than 30%.

AI demand driven

Industry transition to Advanced Packaging

It is worth noting that the closed testing industry has suffered a decline in profits for two consecutive years. In 2022, the overall net profit of the industry was 5.74 billion yuan, down 21.9% from the same period last year; in 2023, it was 2.72 billion yuan, down 52.59% from the same period last year.

The profit of the closed testing industry has declined, mainly due to the weakness of the global economy and sluggish market demand in the past two years, and the semiconductor industry remains in the doldrums. According to the World Semiconductor Trade Statistics Organization (WSTS), the global semiconductor market is expected to be US $520 billion in 2023, down 9.4% from the same period last year.

Since 2024, as the consumer market demand tends to stabilize, under the global artificial intelligence (AI) wave, semiconductor demand is expected to recover rapidly. At present, a number of semiconductor giants have begun the layout of AI semiconductors, including Nvidia, Samsung Electronics, TSMC, AMD and so on. In terms of domestic manufacturers, ZTE, Ruixin Micro, Fuhanwei and other listed companies have a layout on AI chips.

AI, machine learning and other technologies put forward higher requirements for data processing ability. compared with traditional packaging technology, advanced packaging technology in closed test industry can provide more solutions in rewiring layer spacing, package vertical height, Imax O density, on-chip current passing distance and so on.

According to market research firm Yole, the global advanced packaging market reached US $44.3 billion in 2022, accounting for 47% of the total packaging market. It is expected that the market share of advanced packaging will rise to 58% to US $78.6 billion in 2028. The rapid development of advanced packaging technology is expected to promote the technological transformation of the closed testing industry, and the volume and price of packaging equipment and materials will rise simultaneously.

A number of A-share companies have made a layout in advanced packaging technology. Tongfu Weidian said in the annual report that the company continues to strengthen independent innovation in the process of development, and actively carry out the layout of domestic and foreign patents in a number of advanced packaging technology fields. As of December 31, 2023, the company has accumulated 1544 patent applications at home and abroad, with advanced packaging technology accounting for more than 60%. In addition, Changdian Science and Technology, Huatian Science and Technology, Weisheng Technology also have technical reserves.

The organization is optimistic about the closed test plate.

Investment opportunity

A number of institutions are optimistic about the investment opportunities brought about by advanced packaging technology and localization trend. Guotai Junan Securities Research News believes that with the improvement of demand, the closed test plant ushered in a bottom reversal. The proportion of advanced packaging in the Chinese market is lower than that of the world, accounting for 38% in 2022, but it is gradually increasing. With the acceleration of the demand for large computing power, the volume of advanced packaging business is expected.

Changjiang Securities Research News believes that the trend of advanced packaging and localization is expected to bring investment opportunities for equipment and materials. On the one hand, with the slowdown of Moore's Law, the importance of closed testing link is increasing, with 2.5D/3D as the representative of the advanced packaging process than the traditional packaging process steps and processing difficulties are significantly improved, is expected to promote packaging equipment and materials to achieve volume and price rise; on the other hand, Chinese mainland closed testing enterprises gradually move closer to the international advanced level, is also expected to drive the growth of the local supply chain.