Focus on communication equipment parts, bind equipment vendors giant customers. Since the establishment of the company nearly 20 years ago, as a rookie in the field of polymer materials and components in the communication field, it binds core customers with years of experience. In the field of communication equipment, Huawei, Ericsson and Nokia almost monopolize the market supplied by operators, while the company has entered the list of core suppliers of communication equipment giants Ericsson and Nokia in the fields of radio frequency and wave-through protectors, electronic heat conduction and heat dissipation devices and EMI and IP protection devices.
The construction of 5G communication network is growing steadily, and the market of high-performance thermal conductive materials is blooming at many points. According to the forecast of market institutions, 2023 Compact will be the peak period of global 5G communication network base station construction in 2024. China, as an advanced market of 5G network, base station construction has entered a steady development range. The Indian market has entered a period of rapid development, and the company's main customers Ericsson and Nokia are on the list of suppliers of 5G construction equipment in India. We estimate that the global market size of the company's communication base station products in 2025 is 229,346 and 5.22 billion yuan. With the increasing number of innovative application scenarios in the field of AI data communication / new energy, the scale of the heat conduction and heat dissipation market continues to rise. according to our estimation, the global market size of the company's existing heat conduction materials such as heat conduction gasket, heat conduction gel and heat conduction grease in the field of optical module is about RMB 25.1346 billion. In the field of new energy vehicles, the global market size of 2023, 2024, and 2025 is about 96.30, 69,17.738 billion yuan. With the continuous expansion of the downstream field of thermal interface materials, especially the increasing demand in the current energy storage plate and data center, the company is expected to further develop customers and application scenarios in related sectors.
The founding team takes root in the core technology and establishes barriers to technology development. As a polymer material enterprise in the field of communication parts, manufacturers in the industry must respond to the needs of the market quickly. The company attaches great importance to product development and technology renewal iteration, and the proportion of core technology transformed into revenue is rising steadily, leading the industry in the field of high K-value thermal interface materials, becoming the first domestic manufacturer that can supply thermal conductivity gaskets with a thermal conductivity higher than 20W/ m ·K in bulk.
Investment suggestion: we predict that the company will achieve a home net profit of 1.09158max in 2023-2025, a year-on-year increase of 44.5%, 44.5% and 40.4%, respectively. It is estimated that the EPS for the same period will be 1.09, 1.58 and 2.22 yuan respectively, corresponding to a multiple of PE in 40-28-20, considering the company's entry into new energy vehicles, Dintong liquid cooling centers and the increase of added value in the communications industry in terms of heat conduction and cooling materials for its high gross margin products. The company develops to the integrated thermal management system business and draws the second growth curve. We believe that the profit side of the company has greater flexibility in recent years. Consider that the company expects related business revenue and profits to maintain a high growth rate from 2023 to 2025, covering it for the first time and giving it a "recommended" rating.
Risk tips: the development process of high-performance heat conduction and heat dissipation devices does not meet the market demand; the sharp rise in raw material prices leads to a substantial increase in production costs; market segmentation customer expansion is not as expected.