Leading company in graphite heat dissipation materials, showing style with rapid revenue growth
The company is a diversified functional material provider with thermal management materials as the core, and is committed to improving the stability and reliability of electronic and electrical products. The company mainly sells thermal management materials such as artificially synthesized graphite heat dissipation films and artificially synthesized graphite heat sinks, which are mainly used in consumer electronics applications such as smartphones, tablets, laptops, and smart wearables. The company's revenue has shown a rapid growth trend in recent years. The company achieved total revenue of 423 million yuan in 2022, which is close to 3.3 times that of 127 million yuan in 2017. It is mainly due to the continuous increase in sales of the company's thermal management materials and achieved net profit of 58 million yuan to mother. In the first three quarters of 2023, the company achieved revenue of 323 million yuan, a year-on-year increase of 11.00%, and achieved net profit of 38 million yuan, an increase of 13.15% over the previous year, mainly due to the increase in sales of major North American customers in the current period.
The mobile phone cooling materials market is growing rapidly. The company has entered the supply chain of major customers in North America. According to Yole's forecast, the global mobile phone cooling market will grow from US$1.42 billion in 2018 to US$3.58 billion in 2022, and the compound annual growth rate of the global mobile phone cooling market will reach 29.72% from 2019 to 2022. Since its establishment, the company has been focusing on high thermal conductivity materials used in the field of thermal management of electronic and electrical products, and has become a qualified supplier for mainstream customers in the industry such as Xiaomi, Vivo, and Samsung. In 2022, the company was certified as a qualified supplier from a major North American customer and successfully entered its supply chain.
Expanding magnetic/nano protective materials horizontally and raising the production capacity of new heat transfer materials in 2022, the company's nanocrystalline soft magnetic alloys and nano protective films achieved revenue of 257 million yuan and 4.43 million yuan respectively, accounting for 0.61% and 1.06% of revenue, respectively. In the future, with the increase in downstream demand and the expansion of the company's business, related businesses are expected to continue to grow, contributing to new growth points in the company's profits. The implementation of the company's fund-raising project will greatly increase the company's production capacity, help the company grasp the development trend of the downstream industry, and increase its market share and profitability.
Profit forecasting and valuation
We forecast that the company's total revenue for 2023-2025 will be 4.80/64/ 928 million yuan, respectively, with year-on-year growth rates of 14%/36%/42%, respectively, and net profit attributable to the parent company of 0.74/1.00/132 million yuan respectively, with a year-on-year growth rate of 27%/35%/32%, corresponding EPS of 1.29/1.73/2.29 yuan, corresponding PE of 57.87/42.98/32.54 times respectively. The first coverage gave a “gain” rating.
Risk warning
Risk of falling product prices, risk of innovation, risk of downstream industry and customer concentration.