Focus on the field of non-ferrous metal powder materials. Youyan powder is the leading enterprise in the field of copper-based metal powder materials and tin-based welding powder materials in China. The domestic market share of advanced copper-based metal powder materials is about 35%, ranking first in China, and the total sales in 2019 ranks second in the world. The company's domestic market share of high-end microelectronic tin-based welding powder materials is more than 15%, ranking first in the country. The company has actively expanded the field of product application, promoted the industrial layout at home and abroad, successively integrated Compxiway, Youyan heavy Metallurgy, Makin and other companies, and actively built domestic regional industrial bases such as Chongqing, Anhui and Shandong, as well as international industrial bases such as Britain and Thailand. The company and its wholly-owned subsidiary Kangpu Xiwei cooperate with Steel Research Investment Co., Ltd. to integrate the related resources of 3D material enhancement manufacturing and high temperature special powder materials business plate, and the newly established holding company has research and increase materials to open up new growth space.

There is research to increase the production capacity on the ground, and 3D printing opens a new growth space. The company and its wholly-owned subsidiary Kangpu Xiwei cooperated with Steel Research Investment Co., Ltd. to set up the business of 3D increasing material manufacturing and high temperature special powder materials. The production capacity of 3D reinforced powder materials is 500t. It mainly includes aluminum alloy powder (200t), superalloy powder material (200t), titanium alloy powder (75t) and copper alloy powder (25t). The production capacity of high temperature special powder material is planned to be 2000 tons. Mainly include soft magnetic powder, MIM powder, vacuum brazing powder and so on. At present, the production capacity of 3D increasing material production line has been completed, gradually increasing volume according to the market demand. The 3D printing market is developing rapidly. the global 3D printing market is about US $15 billion in 2021 and is expected to reach nearly US $30 billion in 2025. The GAGR is 18.2% in 2021-2025. The domestic 3D printing market is expected to reach about 26 billion yuan in 2021, and the domestic 3D printing market is expected to reach 50 billion yuan in 2024 and 24.4% in 2021-2024. 3D printing materials account for about 20% of the overall 3D printing market and will benefit the growth of the industry as a whole.

Copper-based plate: layout of overseas production bases to expand the global market. The company has successively integrated Kangpu Xiwei, Youyan heavy Metallurgy, Makin and other companies to create the industrial layout at home and abroad. At present, industrial bases such as Chongqing, Anhui, Shandong, Britain and Thailand have been built. The Chongqing base is expected to be debugged and put into production by the end of June 2023. Thailand industrial base is expected to be completed and put into production by the end of September 2023. After each base capacity is put into production, the total production capacity of copper-based powder materials will reach 40,000 tons. The company has occupied a high share of the domestic copper-based powder material market, and the overseas production base and the British subsidiary Makin are expected to further increase the overseas market share.

Tin-based plate: vertical extension of the industrial chain, the development of high value-added products. After the fund-raising project is put into production, the total production capacity of the company's tin-based powder materials will reach 5000 tons. The development path of the company's tin-based business segment is mainly to high additional products, including upgrading to finer-grained high value-added tin powder and extending downstream of tin powder to expand higher value-added products such as solder paste. Electronic paste link is also one of the key business directions of the company in the future.

Investment suggestion: the company is the leader of domestic copper-based and tin-based powder materials, Chongqing base and Thailand base projects to achieve further expansion of production capacity, tin-based powder materials to high value-added products, profitability is expected to improve, 3D printing powder material production capacity is expected to gradually contribute to the new increment of performance along with market demand. We expect the company to achieve net profit of 0.88,1.14 and 153 million yuan from 2023 to 2025, and the PE corresponding to the stock price on July 20, 2023 is 45X, 35X and 26X respectively, covering for the first time and giving a "recommended" rating.

Risk hint: downstream demand is lower than expected, raw material price fluctuation risk, R & D progress is not as expected.