Stike is one of the leading coating manufacturers with self-development and synthesis ability of coating materials as well as global benchmarking enterprises (3M Company, Nitto, Desa). The company has been ploughing the functional coating composite industry for 17 years. At present, the products are mainly used in intelligent terminals, new displays, new energy vehicles, electronic components and other fields, and have established stable cooperative relations with a number of well-known terminals at home and abroad.
OCA optical adhesive: the electronic tape spire of the 10 billion-class single product, the company took the lead in the domestic breakthrough. OCA is the key bonding material of touch screen and optical film, which has high technology and certification threshold. According to DataBridge,2021, the global OCA market is worth 2.07 billion US dollars, which is mainly supplied by overseas manufacturers such as 3M Company. In 2021, the company independently developed OCA to achieve a breakthrough in some terminals, taking the lead in mass production of folding screen OCA in China.
New optical industry: folding screen, VR/AR, HUD ushered in the singularity moment, bending folding layer, Pancake film group, optical dustproof cover has a bright future. 1) folding screens have become a major innovation of smartphones. Falling prices stimulate users' demand for replacement. Counterpoint expects global shipments to exceed 100 million units in 2027 and CAGR to exceed 50% in 2022-2027. 2) Apple Inc Vision Pro ushered in a new era of hardware iteration, and AI will also push VR/AR into a mature fast lane. Wellsenn expects global shipments of 45 million units in 2027 and 35% of CAGR in 2022-2027. 3) HUD is an important interactive window for the intelligent cockpit. GGAI expects the domestic loading rate to increase from 10% in 2023 to 30% in 2025. The rapid development of new display has put forward new requirements for optical materials and applications.
The company's advantages: innovative R & D, precision manufacturing and rapid response ability formed by continuous high investment. 1) the company insists on self-research of key materials such as OCA and functional coating, accumulates mature experience in many display fields, integrates the latest technology and technology, and provides "one-stop" solution. 2) the company has first-class production equipment and a hundred-class dust-free production environment, and the whole process of the industrial chain is controlled to ensure the quality of mass production. 3) the company's "embedded" R & D system improves the efficiency of new product development and takes the lead in cooperation with head terminal customers.
Investment suggestion: we expect the company's net return profit in 2023 to 2025 to be 2.21 million RMB 335,521 million, corresponding to the closing price PE on September 20 of 36.0 Sterling 15.2 times. Coverage for the first time, giving a "overweight" rating.
Risk hint: the risk that terminal shipments are less than expected; R & D expenses and depreciation of fixed assets may affect apparent performance; some raw materials need to be imported from overseas.