"Misunderstood 68% Plunge: Leader Invests 580B KRW in LG's Color Photoresist Project"

Today, the Shanghai Composite Index rose by 0.54% for the entire day, and the ratio of the number of stocks that rose to those that fell was as high as 2.4:1, indicating that A-shares were in a general upward trend today.

Although the market rose today, the financial report translator personally believes that this round of adjustment has not ended. This period is akin to the Spring and Autumn and Warring States periods, where despite the continuous emergence of the Five Hegemons of the Spring and Autumn period and the Seven Warring States, the overall direction of the market was not unified and was accompanied by significant risks.

Therefore, in the upcoming trading days of this week, the financial officer advises everyone to control their chips and choose companies with not very high increases to engage in speculation. Do not recklessly assume that the market will definitely rise in the future.

At present, it is an undeniable fact that the semiconductor and photolithography machine sectors have become the main line of A-shares. Today, the official will delve into the analysis of the photolithography machine sector and introduce an undervalued big leader within the photolithography machine sector, which is Yak Technology.

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The company's photolithography products mainly include positive TFT thin film circuit photoresists, RGB color photoresists, OCPS photoresists, CNT anti-static materials, and photoresist auxiliary reagents, with customers including domestic leading display panel manufacturers such as BOE, TCL China Star Optoelectronics, Guangzhou LGD, and Huike.

In addition, the financial officer also found that another main business of this enterprise is semiconductor precursors, and the company's precursor materials are mainly used in semiconductor thin film deposition processes.

In the first half of 2024, the global integrated circuit industry entered an upward cycle, and the utilization rate of chip manufacturers' production capacity increased. At the same time, the growth in applications such as artificial intelligence, consumer electronics, big data, and cloud computing continues to drive the demand for integrated circuits, and high-bandwidth memory is increasingly popular in AI servers, leading to a significant increase in the sales of the company's semiconductor precursor materials.

Compared with other companies in the photolithography machine sector, this enterprise's increase is not very large, and it is still in the adjustment phase. Having seen the basic situation of the company above, let's analyze the financial report of this enterprise below.

Through analysis, the financial officer found that the biggest highlight of this company in the second quarter of this year was the significant increase in orders received from customers.

In the second quarter of 2023, the orders received by this enterprise, that is, the contract liabilities, were only 567 million yuan. By the second quarter of 2024, this figure reached 1.192 billion yuan. This not only increased significantly by 110% year-on-year but also set a historical record.Due to an increase in customer orders, the company's net profit for the second quarter of this year not only increased but also allowed the management to expand production during the reporting period, enhancing the production capacity of semiconductor precursors and photoresists.

Starting from 2022, the company's historical net profit has grown for two consecutive years, reaching a historical high of 579 million yuan in net profit in 2023.

By 2024, the company achieved a net profit of 520 million yuan in just two quarters, a year-on-year increase of 52%.

The company's current net profit ranks 3rd among the 83 listed companies in the A-share photolithography machine concept sector. This high ranking indicates a relatively large scale.

In addition to the increase in net profit, during the reporting period, the management also expanded production and increased the amount of inventory.

In the second quarter of 2023, the company's inventory was only 1.2 billion yuan. By the second quarter of 2024, the company's inventory reached 1.986 billion yuan. This represents a year-on-year increase of 65% and a historical high.

The increase in inventory to a historical high indicates that the management pressed the fast-forward button in the second quarter of this year, preparing to increase net profit by expanding production.

The reason for the increase in inventory is the rise in customer orders, so not only can these inventories be sold, but the company's future net profit will also see a significant increase. Finally, let's take a look at the company's construction capacity.

At present, the company has 7 semiconductor production projects under construction, and the estimated total investment for these projects exceeds 4.9 billion yuan.

After comparing with the company's existing production capacity, the financial officer found that if these construction projects can be completed, the company's production capacity, that is, the ability to produce semiconductors and photoresists, will increase by more than three times, which also lays a solid foundation for the company's future net profit growth.Here is the English translation of the given text:

There is one point that requires our attention: the growth of net profit is in the past tense and does not help the company's future growth. However, the increase in inventory and production capacity can increase the company's future net profit, which is the growth potential of the company.

Through the above analysis, we understand that in the second quarter of 2024, the company made a qualitative leap. Not only did the company's net profit increase significantly, but the management also expanded production and increased production capacity during the reporting period. Therefore, the financial officer speculates that it is highly likely that the company's net profit growth will occur this year.