Event: signed a cooperation agreement with Suzhou Juyi to jointly build a polyimide (PI) resin and film production line to promote the product development and industrialization of yellow PI and transparent PI.

Main points:

1. Join forces to jointly promote the industrialization of PI. Suzhou Jujie has rich experience in the field of synthesis and modification of PI resin. At present, it has completed the pilot test of yellow PI products, formed a number of independent intellectual property rights and obtained a number of intellectual property rights of transparent PI, such as APS, and is cooperating with customers to develop transparent PI products in the display field. Suzhou Jujie mainly organizes the production of resin products. New fiber technology has the world's advanced coating technology, responsible for the optical film preparation and coating functionalization of PI resin materials.

2. the core material of the card position, fully enjoy the localization of the flexible display market. PI film is the core material of photoelectric display in the future. As the replacement of LCD by OLED has gradually become a trend in the display industry, the display panel is moving in the direction of curved surface → foldable → curl. Among them, the organic light-emitting materials and the film materials used are the key to the flexibility of OLED. At present, yellow PI is the substrate of mainstream OLED products, and transparent PI is the best way to replace glass substrate in foldable and curable OLED products in the future. The signing of this cooperation agreement will help the company expand its business from precision coating to the manufacture of upstream resin and base film, and improve the upstream and downstream industrial chain in the field of optoelectronic display.

3. The optical film will open up the future growth space of the company. Changzhou Phase III Optical Film Project is the main strategic direction of the company in the future. Optical film market space is vast, the company focuses on the layout of vehicle explosion-proof film, CPI, polarizer film (TAC, COP) and other high-end products. The company's two production lines were officially put into production in November 18, and it is expected that three more production lines will be put into production in March 19.

4. Profit forecast and rating

It is estimated that the return profit of the company from 2018 to 2020 is 4.52,6.47,920 million yuan, the EPS is 0.39,0.56,0.80 yuan, and the corresponding PE is 33x, 23x and 16x. According to the 19-year 30X valuation, the target price is 16.8 yuan, with a "buy" rating.

Risk hint: sales of adhesive tape and aluminum-plastic film are not as expected.