This report is read as follows:

The company takes electrical insulation materials as the core to create a new material business system, optimize the industrial layout and promote the depth and breadth of the industrial chain. We are optimistic that the company will cut into the field of new photovoltaic materials in the future.

Main points of investment:

For the first time, coverage gives an overweight rating: we predict that the company's homing net profit from 2023 to 2025 will be RMB 0.73 trillion and EPS 1.89 million, respectively, with a growth rate of 5%, 31% and 59%, respectively. The target price is 49.36 yuan (corresponding to 42 times PE in 2024), and the current space is 45.6%. It is rated as "overweight".

The market believes that the excellent performance of composite frame and the limitation of cost reduction space is the key to restrict the improvement of composite frame permeability. The gelation and curing time of the material in the mold determine the low efficiency of the composite frame pultrusion process, and it is difficult to reduce the cost. We believe that with the continuous progress of process improvement, the production speed and efficiency of photovoltaic composite frame will increase rapidly, and the cost will decrease rapidly.

Insulation system overall solution supplier, redefine cost reduction space: the company has a relatively complete insulation resin product system and strong technology industrialization ability, with the advantages of "resin synthesis, pultrusion, spraying": 1) improve the pultrusion speed, accelerate the reaction of resin in the pultrusion process and improve pultrusion efficiency. 2) the core product slot wedge cooperates with the composite frame process, and the competitive advantage is expected to replicate. The prospect of photovoltaic composite frame industrialization is promising, and the company is expected to become the leader in the subdivision field.

Catalyst: downstream verification progressed smoothly; offshore photovoltaic project advanced faster than expected.

Risk hints: significant changes in raw material costs, high customer concentration, inadequate capacity digestion, management and operational risks arising from the expansion of business scale, lower-than-expected project construction of the company, etc.