Optical glue: photovoltaic module packaging new materials leader, the growth of optical adhesive business can be expected with the continuous increase of photovoltaic installed capacity, the whole industry chain cost reduction and efficiency continues, photovoltaic cost reduction gives birth to new technology alternative power. At present, the value of traditional component packaging materials is about 9 cents / W, accounting for about 15% of the non-silicon cost of components. The optical adhesive of Jinfu Technology may meet the requirements of photovoltaic module packaging in terms of product performance, and can be used for photovoltaic module enterprises 1) reduce material usage and cost 2) improve production yield 3) reduce module packaging energy consumption. According to company disclosure, on May 16, 2023, the company joined hands with Tongwei Co., Ltd. to explore a new path for photovoltaic module fitting, and material verification and production line adaptation improvement are expected to be completed in October-December 2023. Referring to the annual strategy report, it is expected that the new photovoltaic installation will exceed 500GW in 2025, corresponding to a film demand of more than 6 billion square meters. If calculated according to 10 yuan per square meter, it will correspond to 60 billion + market space. We expect that there may be substantial orders landing after the verification, which will give a boost to the company's revenue and profits.

Aerogel: the main supplier in Ningde era, the demand for aerogel in the downstream is clear that the demand for aerogel for new energy vehicles stems from the control of the risk of thermal runaway by power batteries, with the introduction of relevant laws and regulations on thermal runaway of new energy vehicles, the demand for aerogel thermal insulation products has a clear growth trend. The company is currently one of the main suppliers of aerogel thermal insulation pads in Ningde era, with shipments and product quality reaching the leading level in the industry. We estimate that in 2023-2025, the domestic aerogel market for new energy vehicles will reach 100 million yuan in 12-23-36, with a CAGR of 73%. We expect the company's aerogel revenue to reach 500 million yuan in 2023 and 2024, and its performance will continue to grow at a high speed. We are optimistic about the certainty of the company's long-term aerogel business growth.

Traditional business: stabilizing and improving, extending actively upstream

The company has worked hard in the field of liquid crystal display module, optoelectronic material die-cutting and intelligent testing tools for many years. After the company's control was transferred to Taixing local state-owned assets in 2019, the company focused on the development of its main business. In terms of traditional main business, the company's LCD module products mainly include backlight module (BLU) and liquid crystal module (LCM), downstream is mainly used in TV and PC display screen, due to fierce market competition, the company actively extends to the industry downstream to the display machine to enhance the added value of products, while expanding customers to the commercial display field. In terms of intelligent inspection automation, the company's products have the ability to detect PCB, flat panel display devices, functional modules, etc., and are in a leading position in the industry. in 2022, the business achieved revenue of 260 million yuan, an increase of 22.95% over the same period last year, a gross profit margin of 44%, and a bright profitability.

Investment suggestion: it covers Jinfu Technology for the first time, with an estimated annual net profit of 0.5max 2.3 / 410 million yuan in 23-24-25, with a "Buy-A" rating of 6.85 yuan per share, corresponding to 23x PE in 2024.

Risk hint: the company's optical glue products and photovoltaic module enterprise verification is less than expected risk, aerogel product sales is not as expected risk, industry competition intensifies risk, hypothesis is less than expected risk