PI film industry barriers are high, the company as a small number of domestic master the core formula, process and equipment technology of PI film manufacturers are expected to continue to benefit. Polyimide film is a polymer material with excellent comprehensive properties, which is widely used in many fields, such as electrical engineering, electronics, microelectronics, aerospace and so on. According to the data of Huajing Industrial Research Institute, the market space of the industry is more than 10 billion. After years of research and development, with mature technology and both chemical and thermal processes, the company has become one of the richest suppliers of high-performance PI film products in the world, accounting for more than 6% of global sales. The company seizes the opportunity of domestic substitution to expand production capacity and quickly respond to market demand through rich categories, and is optimistic that the market share will further increase in the future.

Company for the domestic PI film leading enterprises, capacity expansion at the same time the product range continues to be rich. Against the background of weak terminal demand such as consumer electronics, the company achieved 122 million yuan in revenue in the first half of this year, down 25% from the same period last year; the net profit lost 7.9 million yuan in the first half of this year, down 129% from the same period last year, including 77.31 million yuan in revenue in the second quarter, down 5% from the same period last year, up 73% from the previous year, and a loss of 330000 from the same period last year, down 102% from the same period last year and 96% from the previous year. Although the performance is still under pressure, it improved significantly in the second quarter. In August 2022, the company raised 430 million yuan by issuing convertible bonds, the number of which was 4.3 million, and the latest conversion stock price was 30.91 yuan per share. Of this amount, 330 million yuan is used for the Jiaxing project and 100 million yuan to supplement the working capital. At present, the company's Shenzhen base has achieved mass production of 9 production lines, with a design capacity of 1100 tons; Jiaxing base project plans to increase the production capacity of 1600 tons, and has begun to put in materials for product commissioning. With the development of new application fields, the company has actively expanded the business of new products, and has realized small batch sales of MAM products for aerospace and sample sales of CPI films for flexible displays. At present, the company's CPI film has a small-scale mass production capacity, the 50-ton special production line project has entered the process optimization stage, the future is expected to fill the domestic gap and create a new performance growth point.

Earnings forecasts, valuations and ratings

We predict that in 2025, the company will achieve operating income of 296 million / 575 million / 883 million yuan, year-on-year-1.83%, 94.29%, 53.44%, and net profit of 2 million / 64 million / 123 million, and-95.41%, 3472.63%, 93.56%, respectively, corresponding to EPS of 0.01, 0.354, and 0.685 yuan respectively. As the leader of domestic PI film, with the recovery of industry demand and the development of downstream customers, the new production capacity is expected to increase rapidly so as to promote the performance to return to the period of rapid growth. As a rare domestic independent research and development and complete mastery of the core process formula technology of PI film manufacturers, the company will benefit from the import of polymer materials to achieve long-term growth, giving the company 2024 65 times PE, corresponding to the target price of 23.02 yuan. Coverage for the first time, giving a "overweight" rating.

Risk hint

Raw material prices fluctuate sharply; product prices decline; new production capacity is difficult to digest; R & D progress is not as expected; the ban on restricted shares is lifted; the risk of non-consolidation of projects under construction.