Glinda: China's leading supplier of wet electronic chemicals. The company specializes in the R & D, production and sales of ultra-clean and high-purity wet electronic chemicals, including developer, etching solution, diluent, cleaning solution and so on. The downstream application fields of the company's products are mainly display panels, semiconductors, solar cells and so on. The main product market is concentrated in the display panel field, accounting for about 95%. From 2017 to 2019, the company's operating income was 403 million yuan, 513 million yuan and 525 million yuan respectively, an increase of 30.21%, 27.06% and 2.33% over the same period last year. From 2017 to 2019, the company's return net profit was 58 million yuan, 89 million yuan and 102 million yuan respectively, and the sales gross profit margin was 37.73%, 38.82% and 40.60% respectively.
The prosperity of the downstream industry is rising, driving up the demand for wet electronic chemicals. Liquid crystal panels, semiconductors and solar cells are the three major application fields of wet electronic chemicals. in recent years, with the continuous growth of the downstream industry, the wet electronic chemical industry has developed rapidly. In 2018, the overall market size of wet electronic chemicals in the world is about US $5.265 billion, with the application volume of the three major markets reaching 3.07 million tons. It is estimated that by 2020, the overall global market for wet electronic chemicals will reach US $5.85 billion, with 3.88 million tons of applications in the three major global areas, with a compound growth rate of about 12.42%.
The main business is outstanding, TMAH developer to achieve domestic substitution. In the past three years, the company's main business wet electronic chemicals accounted for more than 99% of the total revenue, and more than 95% of the main business income came from functional wet electronic chemicals. The company's core product TMAH developer breaks through the foreign technology monopoly and reaches the SEMIG4 level, which is one of the key materials in the production process of LCD and OLED display panels, which effectively promotes the localization process of the high-definition display industry. From 2017 to 2019, the sales revenue of the company's TMAH developer was 332 million yuan, 424 million yuan and 428 million yuan respectively, accounting for 82.26%, 82.62% and 81.64% of the total revenue. We believe that the company's main product advantages are obvious, with capacity expansion, the company's product market share is expected to further increase.
Raise funds to expand product capacity. The annual production capacity of the company's TMAH developer is 56000 tons, and the company's TMAH output in 2018 has reached 57700 tons, and the capacity utilization has been saturated. The funds raised by IPO are mainly used for the construction of the first phase of the "Sichuan Glinda 100kt/an Electronic Materials Project". It is estimated that the investment amount of the first phase of the project is 363.3144 million yuan. After the fund-raising project is put into production, it will increase the annual production capacity of 40,000 tons of TMAH developer, 5000 tons of aluminum etching solution and 15000 tons of fluorine-containing buffer oxidation etching solution (BOE etching solution).
Profit forecast and investment rating. We estimate that the return net profit of the company from 2020 to 2022 is 117 million yuan, 139 million yuan and 167 million yuan respectively, and the corresponding EPS is 1.15,1.36 yuan and 1.64 yuan respectively. We carefully give the company 35-40 times PE in 2020, and the corresponding reasonable value range is 40.25-46 yuan, which is better than that of the big market.
Risk hint: the profit of the fund-raising project is lower than expected, and the risk of raw material price fluctuation.
