Main points of investment

Next Wednesday (September 6), there will be an inquiry about the price of Zhongyan shares, a listed company of Science and Technology Innovation Board.

China Research Co., Ltd. (688716): the company is mainly engaged in R & D, production and sales of polyether ether ketone (PEEK) in resin form. From 2020 to 2022, the company achieved operating income of 158 million yuan / 203 million yuan / 248 million yuan, YOY of 41.38%, 28.34%, 22.22%, and a compound annual growth rate of 30.41%. The net profit of homing was 25 million yuan / 50 million yuan / 56 million yuan, and the YOY was 80.41%, 103.24%, 11.54%, respectively, and the annual compound growth rate of three years' net profit was 59.92%. During the latest reporting period, 2023H1 achieved an operating income of 140 million yuan, an increase of 28.07% over the same period last year, and a net profit of 24 million yuan, down 0.65% from the same period last year. According to the preliminary forecast, the company is expected to achieve a return net profit of 43 million yuan to 52 million yuan from January to September 2023, an increase of 8.31% from a year earlier.

Investment highlights: 1, the company now has a strong scale advantage; sales domestic first, international leading.

According to the Analysis of the present situation and Development Prospect of Special Engineering Plastics Industry, the import dependence of PEEK in 2020 is as high as 75%. The company has the national production capacity of the whole process, and it is the second enterprise in the world that can use 5000L reactor for polymerization production after Wiggs in the UK, and the large-scale industrial production technology is leading in China; the main performance indicators of the products have reached the international advanced level, taking the lead in replacing international PEEK leaders such as Wiggs. The company is the fourth company in the world with an annual PEEK production capacity of 1000 tons after Wiggs in the UK, Solway in Belgium and Yingchuang in Germany, and it is the Chinese company with the largest domestic PEEK production capacity and output. In 2021, the company's annual PEEK sales are about 622.74 tons, with the fourth global market share (8.07%), and surpassing Wiggs in the UK to become the company with the largest domestic market share (30.57%). 2. The application of PEEK materials is malleable, and the company continues to lay out new fields. PEEK material has good mechanical properties, high heat resistance and corrosion resistance, so it is recognized as one of the best thermoplastic materials in the world, and can be widely used in automotive, electronic information, industrial machinery and energy, medical, aerospace and other key parts or high-end fields; the high-end, automation and lightweight transformation and upgrading of manufacturing industry promote the development of PEEK. As the main domestic PEEK supplier, the company continues to expand the product application field; among them, in the field of consumer electronic parts, the company's mobile phone built-in antenna is starting material testing with relevant industry chain suppliers, most of the indicators already have advantages over international competitors, and it is expected to enter this field in the future. In terms of implantable medical devices, the company cooperates with Kangtuo Medical, Wigao Orthopaedics, Dabo Medical and other well-known enterprises, and some of its products are in the stage of testing and registration. in the field of commercial aircraft, the company jointly developed with Donghua University to solve the neck problem of carbon fiber polyether ether ketone composite (CF/PEEK) in the field of large commercial aircraft. In the field of new energy vehicles, the company is working with customers to develop enamelled wires for new energy vehicles with 800V motors, and continue material testing with cable manufacturers.

Comparison of listed companies in the same industry: according to the similarity of main products and income structure, Tongcheng Xincai, Haohua Technology, Dawn shares, Ruihuatai, Haizheng raw materials and Youjuxinliao are selected as comparable listed companies of Zhongyan shares. From the above comparable companies, the average revenue of comparable companies in 2022 is 2.902 billion yuan, excluding extremely worthy comparable PE-TTM (arithmetic average) is 46.81X, sales gross profit margin is 25.11%; comparatively speaking, the revenue scale of the company is lower than the average of comparable companies, but the gross profit margin is higher than the average of comparable companies.

Risk hint: companies that have started the inquiry process still have the possibility of not being listed due to special reasons, the company content is mainly based on prospectuses and other public materials, and the selection of listed companies in the same industry is not accurate. Risk, content data interception may have interpretation deviation and so on. The specific risks of listed companies are shown in the text.