Tianyi Shangjia has grown into a new material platform company, and the sales volume of metallurgical brake pads has benefited from the continuous growth of travel demand after the epidemic, while the accumulated technical experience has helped the company to look ahead and lay out the field of carbon ceramic brake discs. Photovoltaic new energy business has the advantages of carbon-carbon thermal field and quartz crucible to provide services for downstream customers. The supply and demand of carbon-carbon thermal field system may be gradually improved, and the price of quartz crucible is expected to remain high, which is expected to support the company's continued growth in future performance. We estimate that the EPS of the company in 2023 to 2025 is 0.80max 1.79max 2.71 yuan respectively. Combined with the company's historical PE trend and comparable company valuation, as well as the company's performance growth, we give the company a reasonable PE valuation of 15x in 2024, corresponding to the target price of 26 yuan in 2024, giving the company a "buy" rating for the first time.

Start the rail transit business and gradually grow into a new material platform company. Tianyi Shangjia, founded in 2009, is a leading supplier of powder metallurgy brake pads for high-speed rail emus in China. Technology accumulation helps layout carbon ceramic brake discs. In the future, powder metallurgy brake pads and carbon ceramic brake discs can jointly expand their applications in the fields of automobile, new energy vehicle and rail transit. The accumulation of carbon and ceramic technology helps the company to successfully cut into the photovoltaic carbon and carbon market, acquire and integrate quartz crucibles to provide customers with comprehensive solutions for pulling crystal accessories, and at the same time actively expand new application fields such as negative processing of lithium batteries, strive to build a green energy new material innovation and industrialization application platform company, and give full play to the cooperation of various businesses in customer structure, technology research and development, raw materials, production capacity and equipment.

Rail transit: "Fuxing" bullet train brake core supplier, excellent competition pattern of high-end products. With the recovery of travel demand after the epidemic and the raising of the development target of high-speed rail by the state, we expect the market size of metallurgical brake pads to reach 100 million yuan in 10-14-18 respectively from 2023 to 2025. Tianyi Shangjia takes the lead in starting the domestic replacement process of EMU brake pads, and has become the core supplier of powder metallurgy brake pads for "Fuxing" EMU at a speed of 350 km / h, as well as the manufacturer with the largest number of models covered by domestic certification certificates. Among them, the barriers to high-end products are relatively high, the number of certified enterprises is relatively small, and the competition pattern is more excellent. For many years, the company has always occupied a leading position in the industry by virtue of the advantages of technology, brand, service, channel and so on. In recent years, the market share of the industry has reached 20%-23%. We expect the market share to increase to about 40% in 2023.

Photovoltaic new energy: continuously improve the integrated service of crystal pulling auxiliary materials. The company has formed two major businesses of carbon-carbon thermal field and quartz crucible to provide auxiliary materials services for downstream crystal-pulling customers. Carbon and carbon heat field, at present, under the loose supply and demand, the profit of the industry has declined significantly, the non-net interest rate deducted by leading companies has generally dropped to less than 10%, and the profit pressure of second-and third-tier enterprises is greater. We expect that the progress of production expansion in the carbon-carbon thermal field industry may slow down in the future. with the continuous growth of new photovoltaic installations and the increase in carbon-carbon system permeability, the loose pattern of supply and demand is expected to improve gradually. at the same time, the continuous infiltration of lithium cathode field will also open up new growth space. The company relies on self-made preform, large-size equipment, optimization process and other ways to achieve high equipment yield efficiency, low power consumption per ton, low manufacturing cost and other advantages, profitability is at a high level in the industry. In terms of quartz crucibles, the demand for high-quality and large-size quartz crucibles continues to increase due to factors such as the large size of silicon wafers and the increase in the proportion of N-type batteries, but due to the scarcity of quartz ore sources and the need for certain accumulation of purification technology, the supply increment of effective quartz sand is limited, so we expect the price of quartz crucibles to remain high in the next 1 ~ 2 years. Through the acquisition of Jingyingyang in 2022, the company has quickly become the core supplier of the industry, and has supplied to many downstream customers, such as Jingke, Gaojing, Tianhe, etc., and the superposition company has actively built 20 production lines in Sichuan Jiangyou Industrial Park. we expect the company's quartz crucible business profit to reach 4800 million yuan from 2023 to 2024.

Carbon ceramic moving disc: forward-looking layout, broad space in the future. The carbon ceramic brake disc has the advantages of lightweight, high temperature resistance, thermal decay resistance, strong environmental adaptability and low wear rate, which can greatly improve the handling performance of the vehicle. We believe that with the reduction of the cost of raw materials and the optimization of preparation process, the permeability of carbon ceramic disc may be gradually increased. The company's years of experience in the field of metallurgical brake pads can help its research and development of carbon ceramic brake disc. at present, the company already has the technical capabilities of carbon ceramic brake disc preform weaving, vapor deposition and ceramic infiltration, and has established project cooperation relations with 19 automotive mainframe manufacturers and supply chain customers in the first half of 2023 to jointly promote the application of carbon ceramic brake disc in the field of commercial vehicles.

Risk factors: the risk of bad debts of accounts receivable; the risk of deteriorating competition in the industry; the risk of price fluctuations of raw materials; the risk that photovoltaic demand is lower than expected; the progress of new production capacity is not as expected; the military business expansion is not as expected.

Earnings forecast, valuation and rating: it is expected that the company's traditional business metallurgical brake will benefit from the recovery of travel demand, while new businesses such as carbon-carbon thermal field, quartz crucible and carbon ceramic disc will support continued growth in future performance. Combined with the company's development planning and changes in industry supply and demand, we estimate that the company's EPS in 2023 to 2025 is 0.80 PE 1.79max 2.71 yuan. Combined with the company's historical PE trend and comparable company valuation, and considering the company's performance growth, we believe that the company's reasonable PE valuation in 2024 is 15x, corresponding to the 2024 target price of 26 yuan, covering the company's "buy" rating for the first time.