Event description
The company released its three-quarter report in 2023, realizing revenue of 1.51 billion yuan (year-on-year), net profit of 80 million yuan (- 49.9%) and non-net profit of 60 million yuan (- 59.6%). Among them, Q3 realized revenue of 530 million yuan (year-on-year-9.8%, month-on-month + 6.8%), realized attributable net profit of 20 million yuan (year-on-year-74.4%, month-on-month-55.4%), and realized attribution deduction of non-net profit of 10 million yuan (year-on-year-85.9%, month-on-month-72.2%).
Event comment
The company is the leader of functional coating composite materials, expanding horizontally and longitudinally to open the development boundary. The company's main products are divided into functional film materials, electronic grade adhesive materials, polymer film materials, thermal management composites and film packaging materials, used in consumer electronics, new displays, new energy vehicles, household appliances, ceramic capacitors and other key fields. The company continues to expand new categories, focusing on OCA adhesive and coating, precision release film, upstream PET base film, self-made glue and other aspects, horizontal and vertical expansion, continue to enhance the company's core competitiveness.
Asset consolidation superimposed costs rose, 2023Q3 performance under pressure. Since 2023, the demand for terminal consumer electronics has recovered slowly, a large number of new projects have been put into production, and revenue has grown steadily quarter by quarter. However, due to the significant increase in depreciation and amortization brought about by the conversion of new projects (an increase of 630 million yuan in 2023Q3 fixed assets) and an increase in R & D expenses (an increase of 40 million yuan in 2023Q3 R & D expenses), the company's third-quarter results were under pressure. Looking to the future, due to the rising prices of parts and components and the decline in the level of channel inventory, orders and profits in the smartphone supply chain have warmed up, and the company's continued volume in the areas of folding screen, AR/VR, new energy vehicles, MLCC release film and other areas is expected to gradually pick up.
Projects under construction continue to move forward, and there is a broad space for the future. The company raises funds through IPO and fixed increase, and invests in a number of projects. at present, OCA fundraising project, PET base film 1max No. 2 line, precision release film coating project have been successfully put into production, functional tape, polarizer protective film, PET base film No. 3 line and other projects are in the process of promotion, the follow-up will gradually put into production, thickening the company's profits.
OCA optical adhesive and precision release film have a wide space for domestic substitution. OCA optical adhesive products have high added value, and the precision release film is mainly used for OCA optical adhesive, MLCC and polarizer. According to the OCA downstream smart phones, tablet computers, PC, car displays, wearable devices and other different areas of demand calculation, the global OCA glue market of nearly 10 billion yuan, with the substantial increase in the price of single OCA optical glue for folding screen mobile phones and the expected rapid increase in shipments of folding screen phones, it is expected to bring a new round of growth opportunities in the OCA optical glue market. The company's OCA optical adhesive has been steadily mass-produced in AR/VR terminals and folding terminals, and mainstream screen factories have verified curved screen OCA, which is expected to be mass-produced by the end of this year. With the switch from 4G to 5G, the rise of wearable devices, and the rapid increase in the penetration of new energy vehicles, the global consumption of MLCC will maintain rapid growth. It is estimated that from 2021 to 2025, the global market space for MLCC release membranes will increase from 26.5 billion yuan to 36.1 billion yuan. The global market demand for polarizer in 2021 is 510 million square meters, and the market space for release film corresponding to polarizer is 9.18 billion yuan.
The company is in the leading position in the field of new adhesive materials and functional films. The release of OCA glue and the localization of high-end release films open the space for future development. The net profit vested in 2023-2025 is expected to be 1.2 billion yuan, 3.5 billion yuan. Maintain a "buy" rating.
Risk hint
1. the recovery of downstream demand is not as expected.
2. The progress of the new project is lower than expected.