Items:
According to Witsview data, TV panel prices rose collectively in late November, while the decline in some panel prices for desk monitors and laptops gradually stopped, rebounding for the first time since the TV panel downward cycle in June 2021.
Guoxin Chemical's viewpoint:
1) leading enterprises of TMAH developer, concentrated release of production capacity:
Glinda is a leading manufacturer of wet electronic chemicals in China, and its main product is TMAH developer. At present, the related technical specifications of the company's core product TMAH developer have met the requirements of SEMI G5 standard, and the products can be used in photovoltaic solar cells, panels and semiconductors. The company's products have finally entered the well-known display panel manufacturing enterprises at home and abroad, such as Beijing Oriental Group, South Korea LG Group, Huaxing Optoelectronics, Tianma Microelectronics, CLP Panda and so on.
By 2018, the company has a market share of 4.23% in domestic wet electronic chemicals and 43.95% in the domestic developer market.
The company currently has a production capacity of 90,000 tons of TMAH developer and 40,000 tons of other mixed products. In the construction of Hangzhou Glinda and Sichuan Glinda projects, a total of 56000 tons of TMAH developer, 10,000 tons of BOE etching solution and 5000 tons of aluminum etching liquid are expected to be put into production in 2022, and in the construction of the Ordos project, the company plans to produce more capacity and rich product categories to build a better product matrix to help the company grow steadily for a long time.
2) downstream localization + high-end production speed up production, wet electronic chemicals rise:
In 2020, the global market for wet electronic chemicals is 5.084 billion US dollars, and the domestic market for wet electronic chemicals is 10.062 billion yuan, accounting for about 22% of the global demand. By 2020, China has basically realized localization in the field of solar panels with low technical requirements, with a localization rate of 40% in the panel field, and only 23% in the field of semiconductors. The field of high-end wet electronic chemicals such as OLED panels and large-inch wafers is still monopolized by South Korea, Japan and other enterprises. with the transfer of global panel and semiconductor production capacity to China, China's wet electronic chemicals have huge domestic alternative space. As far as the panel sector is concerned, it is greatly affected by the epidemic and is expected to continue to grow with the repair of the epidemic; the consumption of wet electronic chemicals in OLED is seven times that of LCD, in contrast, the increase in the permeability of OLED will significantly increase the room for demand growth for wet electronic chemicals. As far as the semiconductor field is concerned, China's 12-inch wafer planning monthly production capacity of 1.34 million, double the existing production capacity, 8-inch wafer planning monthly production capacity of 270,000. The wet electronic chemical consumption of 12-inch wafers is about 239.82 tons per ten thousand wafers, which is 7.9 times that of 6-inch wafers. By 2024, it is expected that the domestic demand for wet electronic chemicals will exceed 1 million tons, and the new part mainly comes from 12-inch wafers. The technical and technological requirements for wet electronic chemicals are also higher, and G5 grade wet electronic chemicals will usher in the demand. With the improvement of the localization rate and high-end rate of the electronics industry, the demand for wet electronic chemicals will continue to be released.
Risk hints: the risk of substantial fluctuations in raw material prices, the risk that the progress of production capacity construction is not as expected, the risk of intensified competition in the industry, and the risk that domestic substitution is not as expected.
Investment suggestion: according to our estimates, the company's net profit from 2022 to 2024 is estimated to be RMB 1.85max 286pm, a year-on-year growth rate of 31.6%, 54.6% and 30.5%, and earnings per share is RMB 0.92 per share, with the current share price corresponding to PE of 34Comp22Unix. We believe that the company, as a domestic TMAH developer leading enterprise, has a large scale of new production capacity, and the company cuts into the semiconductor field from the panel field, opens the second growth source of downstream demand, and is optimistic about the company's long-term and steady growth.
Risk hint
The risk of large fluctuations in raw material prices, the risk that the progress of production capacity construction is not as expected, the risk of intensified competition in the industry, and the risk that domestic substitution is not as expected.
