Domestic PEEK leading enterprises, technology accumulation to create multiple advantages. PEEK is a kind of high-performance special polymer material with a wide range of applications; the company is currently the leading PEEK company in China, with an annual production capacity of about 1000 tons. In 2021, the company's annual PEEK sales are about 622.74 tons, and its global market share is about 8.07%. After years of technology accumulation, the company's product advantages are significant. Compared with the international PEEK leading enterprises, the company's low cost in raw material procurement, labor, manufacturing costs, energy power and other aspects to create a comprehensive cost advantage, and then transformed into a price advantage, and with excellent product quality and relatively low prices to open up customers, PEEK production and marketing scale leading in China.

Semiconductors, new energy and health care go hand in hand, which is expected to create an increase in PEEK demand.

The company's current products are mainly profile and injection molding, of which profile customer income accounts for 65% Mel 70%, while injection molding customer income accounts for 25% Mel 30%, which is in line with the characteristics of the industry. With the enrichment of PEEK application scenarios and the expansion of the company's customers, the proportion of injection molding products is expected to increase gradually in the future. Among them, the semiconductor field: based on the excellent dimensional stability, processability, mechanical properties, corrosion resistance and wear resistance of PEEK, it can be used to produce consumables for semiconductor production processes such as CMP retaining rings, wafer carriers and wafer tools. In the field of new energy: the high temperature and high pressure resistance of PEEK is better than that of some special polymer materials, and its safety performance is higher, so it is more suitable for the production of 800V high voltage and fast charging enamelled wire for new energy vehicles. With the increase of the permeability of fast charging of new energy vehicles, the demand for PEEK in this field is expected to grow rapidly. Medical field: PEEK has excellent biocompatibility and can be used in the production of artificial spinal implants, artificial joints, bone repair products and dental materials. With the improvement of the PEEK quality of the domestic enterprises represented by the company, the material substitution of titanium alloy and the domestic substitution of imported products are expected to be realized in the medical field in the future.

Listed to raise funds for construction projects, reduce costs and increase production to open up room for growth. The company announced the "initial Public offering prospectus (Registration draft)" on August 15, 2023. The company plans to raise about 490 million yuan, which is mainly used for the construction of a comprehensive plant with an annual production capacity of 5000 tons of polyether ether ketone (PEEK) deep processing series products (phase II), including a new production capacity of 5000 tons / year PEEK pure resin particles, 300tons / year PEEK composite reinforced particle products, and 200t / year PEEK products. In addition, it also includes 4000 tons / year of diphenyl sulfone distillation purification and recovery capacity, which not only improves the overall production level of the company, but also strengthens the company's cost control ability to reduce cost and increase production.

Investment suggestion: the company is a leading PEEK company in China, with profound technology accumulation, and gradually expanded to semiconductors, new energy, medical and other fields, with a significant increase. From 2023 to 2025, we expect the company to achieve operating income of 345 million yuan, net profit of 0.67 million yuan, and net profit of 1.06 billion yuan, corresponding to a PE of 53.61 pounds, 34.02, 24.82 times, covering for the first time and rated as "overweight".

Risk hint: the new production capacity is less than the expected risk, the downstream demand is less than the expected risk, and the introduction of new areas is less than the expected risk.