Core views:

A leading domestic electronic chemicals company with advanced packaging materials in electroplating+lithography depth layout. The company is a leading supplier of semiconductor materials in China, forming two major product segments: electroplating solution and supporting reagents, photoresists and supporting reagents. The products are widely used in integrated circuits, new electronic components and display panels.

Electronic chemicals are in urgent need of domestic replacement, and advanced packaging materials can be expected to grow. The company's electroplating solution and supporting reagents, photoresists and supporting reagents are mainly used in integrated circuit packaging and testing. Currently, overseas manufacturers are in a leading position in the field of functional wet chemicals and photoresists, and there is an urgent need for domestic replacement. Advanced packaging is at the intersection of the front process and the back process, and is an important development direction for future integrated circuit manufacturing. With the rapid growth of the advanced packaging market, it is expected to greatly drive the market for advanced packaging materials such as electroplating solutions, supporting reagents for electroplating solutions, photoresists, and supporting reagents.

Advanced packaging+wafer manufacturing+display opens up room for growth, and the overall solution strengthens customer resources.

The company is one of the top two manufacturers of electroplating solutions and supporting reagents for semiconductor packaging in China, and its products are widely used by leading integrated circuit packaging and testing companies. The company has successfully achieved large-scale supply of photoresist supporting reagents to downstream packaging manufacturers, and is also actively developing photoresist research and development. The company's product development direction has gradually expanded to fields such as display panels and wafer manufacturing. The company provides customers with turnkey one-stop overall solutions, enhances customer satisfaction, and deepens cooperative relationships with downstream customers.

Profit forecasts and investment advice. We expect the company to achieve revenue of 3.60/455/55,58 million yuan in 2023/2024/2025, respectively. Referring to the valuation level of comparable companies, the company was given a 14 times PS valuation in 2024, corresponding to a reasonable value of 72.25 yuan/share, covered for the first time, and given a “buy” rating.

Risk warning. Market competition heightens risk. Product development verification falls short of anticipated risks. Downstream recovery falls short of anticipated risks.