Key points of investment

Next Wednesday (August 23), a company listed on the Science and Technology Innovation Board, “Zhongjuxin” made an inquiry.

Zhongjuxin (688549): The company focuses on the field of electronic chemical materials, mainly engaged in R&D, production and sales of electronic wet chemicals, electronic special gases and precursor materials. The company achieved revenue of 400 million yuan/566 million yuan/799 million yuan respectively in 2020-2022, YOY was 20.80%/41.38%/41.22%, and a compound annual growth rate of 34.11% of three-year operating income; realized net profit of 25 million yuan/33 million yuan/111 million yuan, YOY was 497.54%/35.06%/-68.42%, turning losses into profits in 2020. In the latest reporting period, 2023H1 achieved operating income of 414 million yuan, an increase of 18.26% over the previous year, and net profit of 19 million yuan, an increase of 53.24% over the previous year.

According to preliminary forecasts, the company's net profit attributable to owners of the parent company from January to September 2023 is expected to be 24.5534 million yuan to 35.67776 million yuan, a year-on-year change of -18.72% to 18.10%.

Investment highlights: 1. The company is a one-stop platform for electronics-specific chemical materials jointly funded by Juhua Co., Ltd. and the National Capital Fund, with the aim of rapidly promoting localization in this field and solving the “stuck neck” problem in the industry. Electronic chemical materials are indispensable supporting materials for integrated circuit production, yet China's independent supply capacity in this field is weak. According to the company's prospectus, the localization rate of electronic wet chemicals, electronic specialty gases, etc. is low (according to the company's prospectus, the localization rate in these two major fields was only less than 9% and 12% before 2019), while the localization rate in the field of precursor materials is extremely low. In this context, China Big Fund and Juhua Co., Ltd. jointly funded the establishment of the company in 2017 (the registered capital of the company is 1 billion yuan, of which Juhua Co., Ltd. and Juhua Corporation each invested 390 million yuan in currency, and the SMIC Affiliated Fund Juyuan Jiuxin also invested. Currently, Juhua Co., Ltd. and Big Fund are ranked as the largest shareholders in the company). As a leading fluorine chemical enterprise in China, Juhua Co., Ltd. has a complete fluorine and chlorine new materials industry chain. With the help of Juhua Co., Ltd.'s rich technical accumulation in the fluorine and chlorine chemical fields, China Big Fund and Juhua Co., Ltd. joined forces to establish Juhua Co., Ltd. Rapidly advance our country Localization process in the field of electronic chemical materials. 2. The company ranks in the first tier of electronic wet chemicals in China. Since its establishment, the company has developed rapidly in the field of e-wet chemicals. Currently, it is ranked in the first tier of e-wet chemicals in China. According to data from the China Electronic Materials Industry Association, the domestic market share of e-wet chemicals in 2019, 2020, and 2021 was 2.23%, 3.68%, and 5.97%, respectively. Among them, the market share of electronic grade nitric acid and electronic grade hydrofluoric acid reached 66.39% and 19.78%. 3. The company has formed a relatively complete product line layout, and the release of additional production capacity is expected to boost the company's further growth. The company has now laid out three major fields of electronic wet chemicals, electronic specialty gases, and precursor materials. In addition to 3 types of electronic grade hydrofluoric acid, etc., which have achieved sales and constitute the main sales revenue, and 2 types of electronic specialty gas products such as high-purity chlorine and hydrogen chloride, and 2 electronic specialty gas products, including electronic grade ammonia, high-purity hydrogen fluoride, and HCDS in precursor materials, can be mass-produced. Two other precursor products are in the customer certification stage. During the reporting period, many of the company's projects have been transformed into construction projects, and the supply capacity for various products, including electronic grade ammonia fluoride, BOE, trifluoromethane, octafluorocyclobutane, and tungsten hexafluoride has been strengthened. Furthermore, in 2022, the engineering subjects under construction listed various projects such as “Fluorinated Electron Gas Project (C1) Phase II”, “Qianjiang Ultrapure Electronics Phase I Project”, and “Qianjiang Ultrapure Electronics Phase II Project”. It is expected that with the completion of the corresponding project construction, the company's electronic grade ammonia, electronic grade hydrogen peroxide, propanol, and electronic grade isopropanol, electronic grade isopropanol, etc. New products such as electronic grade mixed acid, and mature products such as electronic grade sulfuric acid Production capacity is expected to increase further.

Comparison of listed companies in the same industry: Taking into account business and product types, Jianghua Microelectronics, Jingrui Electric, Glinda, Shanghai Xinyang, Feikai Materials, and Xinzhoubang in the field of electronic wet chemicals, as well as Nanda Optoelectronics, Huate Gas, Jinhong Gas, and Yake Technology in the field of electronic specialty gases were selected as comparable listed companies of Zhongjuxin. Judging from the comparable companies mentioned above, the average revenue scale of the industry in 2022 was 2,691 billion yuan, the comparable PE-TTM (arithmetic average) was 52.77X, and gross sales margin was 32.25%; in comparison, the company's revenue scale and gross sales margin were lower than the industry average.

Risk warning: There is still a possibility that companies that have begun the inquiry process will not be able to go public due to special reasons; company content is mainly based on the content of prospectus and other public information; there is a risk that the selection of listed companies in the same industry is not accurate enough; there may be interpretation deviations in the selection of content data. The specific risks of listed companies are shown in the text.