Domestic PI materials leading enterprises, a number of products leading technology. Since its inception, the company has focused on the development of high-performance PI films, the main product series include thermal control PI films, electronic PI films, electrical PI films, etc., in which a number of products fill the domestic gap. At the same time, the company also continues to develop new products, including MAM products for aerospace with good dimensional stability and high temperature sealing, CPI film for flexible display of flexible electronic products such as folding screen mobile phones, PI film with high thermal conductivity graphite precursor to meet the heat dissipation needs of electronic communication terminal equipment, PI film for COF applications in integrated circuit packaging, PI and CPI paste for OLED substrate applications, etc. The company continues to expand a number of application areas, the future increment can be expected.

The shipments of consumer electronics and new energy vehicles are better than the same period last year, and the company's performance is expected to continue to improve. According to wind data, in May 2023, the sales of smartphones and new energy vehicles in China were 25.196 million and 716500 respectively, + 22.60% and + 60.24% respectively compared with the same period last year, and + 39.47% and + 12.58% respectively compared with the previous month. Sales of consumer electronics and new energy vehicles both increased significantly compared with the previous month, and the demand showed a positive trend.

The company's products are eventually used in consumer electronics, 5G communications, automotive electronics and other fields, so with the overall improvement of terminal shipments, the company's performance is expected to continue to improve.

The capacity of Jiaxing will be expanded soon, which will open up the growth space of the company. Based on the existing production capacity of 1050 tons / year, the company has planned another 1600 tons / year production line in Jiaxing, mainly including thermal control PI film, electronic PI film, electrical PI film, special function PI film and other products, which is to expand product categories and end customers on the current basis to consolidate its leading position. By the end of 2022, the installation of four main production lines and the main system of each plant has been basically completed, and two main production lines are being installed. It is estimated that the new production capacity in 2023 is expected to be 400-800 tons, which is expected to begin to expand gradually in the second half of the year, opening up the company's growth space.

Investment suggestion: the company has thermal control, electronic, electrical PI film, excellent performance, in the industry-leading level, at the same time new production line production is imminent. From 2023 to 2025, we expect the company to achieve an operating income of 405x693 million, and a net profit of 0.30Universe 0.98 million. The corresponding PE is 142.56 and 44.10, respectively, 26.33 times, covering it for the first time and giving it an "overweight" rating.

Risk hints: the risk of insufficient demand downstream; the risk that the pace of production of new capacity is not as fast as expected; and that the risk of new product expansion in new areas is less than expected.