Event: the company released the China report in 2023.
Short-term performance is under pressure, waiting for demand to recover: the company's revenue of H1 in 2023 is 980 million yuan, yoy-5.1%; net profit is 60 million yuan, yoy-29.0%; deducts non-parent net profit 50 million yuan, yoy-36.6%,2023 H1 performance is under pressure, and the industry recovery rate is lower than expected. Sub-business point of view: 1) electronic grade adhesive materials revenue 430 million yuan, yoy-3.9%;2) film packaging materials revenue 200 million yuan, yoy-22.0%;3) functional film materials revenue 270 million yuan, yoy-3.0%.
As a leading company in the domestic OCA optical film industry, due to the impact of economic downturn and shrinking market demand in the first half of the year, OCA business development is not as expected and capacity utilization is not as expected. At the same time, as the company's projects under construction have been put into production and consolidation, fixed assets have increased by 350 million yuan compared with the end of 2022, and the growth of depreciation and amortization expenses has affected the performance release.
Electronic-grade adhesive materials have outstanding profitability, and OCA continues to break through: electronic-grade adhesive materials are the company's products with the highest gross profit margin. H1 accounts for nearly 44% of revenue in 2023, and the gross profit margin is as high as 44%. It has supplied well-known customers at home and abroad. At the same time, the company continues to enhance technology research and development and production capacity, gradually expand the market of high-end electronic grade adhesive materials, and constantly increase the proportion of high-end products. The overall market size of OCA optical glue is at the level of 10 billion, which is mainly occupied by manufacturers from the United States, Japan and South Korea. The company's OCA optical film products achieve a breakthrough in VR and mobile phone terminal brands, and at the same time, with the help of cost advantage to cut into the white card and repair market, it is expected to cut into more domestic mobile phone manufacturers, which is expected to lead the domestic replacement of OCA optical glue; at the same time, VR optical pancake innovation also brings more cutting opportunities for the company.
Functional composite materials have a broad demand space, and the performance is expected to achieve a breakthrough: at present, the main application fields of functional materials are automotive electronics and new energy vehicle batteries, mainly related to automotive electronic conductive materials, flame retardant materials, fixed tape of energy batteries, high-performance thermal conductive interface materials and so on. The company's main competitors are overseas suppliers, such as Nitto, Teraoka and so on. At present, the company's market share is still low. The company has become a first-class supplier to major international customers, and has signed the pricing agreement of "Tape inside Cylindrical Battery cells". The cooperation with international key customers of new energy vehicles marks the beginning of the company's accelerated entry into the battery field. considering that the batteries of international major customers are in the stage of rapid self-production, the future cooperation is expected to continue to deepen and contribute significant performance increments.
Profit forecast and investment rating: considering that the recovery of the industry boom in the first half of the year is not as good as expected, we adjust the profit forecast, the 23-25 net profit of homing is adjusted to RMB 2.5 billion (the previous value is RMB 3.5 / 700 million), and the corresponding PE is respectively times that of 34-22-15. Benefiting from the high growth of folding screen sales and the expansion of the company's customers, the company's optics and new energy business is expected to maintain rapid growth, based on comprehensive factors such as the long-term trend of the company's high-end film material industry and the continuous enhancement of the company's core competitiveness. we continue to be optimistic about the company's future growth trend and maintain its "buy" rating.
Risk tips: OCA film and other business orders are not as expected; downstream raw material supply and price fluctuations; consumer electronics and other terminal demand is lower than expected; market competition risk is intensified