The IPO increased paint production expansion, specializing in paint segmentation and leading domestic substitution: in high-end paint markets such as automobiles, ships, aviation, wind power, etc., the current market concentration is high, and most of it is monopolized by more technologically advanced foreign investors. The company specializes in wind power & container coatings, leading domestic replacement. In the context of the “oil to water” development in the paint industry, the competitiveness of the company's environmentally friendly high-performance industrial coatings is expected to improve. After the Zhuhai base is put into operation, the company expects the total paint production capacity to reach 140,000 tons, a net increase of 50,000 tons over the current production capacity, an increase of 55.56%.
Leading supplier in the container paint sector, downstream recovery is expected to boost demand: the company has become one of the four major suppliers in the domestic container coating field. After experiencing a low point in the container industry in 2026, Drewry expects container manufacturing to grow to between 4.4 million and 5.2 million TEU in 2026. Based on the company's stable and high-quality customer base and quality assurance in the container coating field, we assume that the company's market share will increase to 25% in 2026, which will bring the company 6.6-79,000 tons of demand in that year.
Demand for wind power continues to grow, and the leading foundation of blade coatings is expected to be transferred to the amount of new tower coatings: the company is a leading domestic wind power blade coating company. As the installed volume of wind power continues to grow, we expect China's wind power blade paint consumption to reach 45,000 tons in 2025. Due to the stable relationship between the company and leading customers, wind power installed capacity is concentrated on top customers, so assuming that the company's market share increases to 43%, it will bring the company's demand of about 19,000 tons in that year. The company followed the trend and expanded into the field of wind power tower coatings, which is expected to bring in additional volume.
Entering the domestic production of marine & bridge coatings to replace the blue ocean: The company has now entered the list of end user container paint suppliers, including leading shipping companies. It can enter the marine paint supplier system based on existing end customer recognition advantages and resources, and also seek breakthroughs in the fields of large-scale bridge coatings & photovoltaics.
Investment advice: The leading position in the container & wind power paint segment is stable, and the IPO project opens up room for future growth. We expect the company to achieve operating income of 10.57/15.56/1,955 billion yuan in 2023-2025, and net profit of 1,86/311/373 million yuan to mother. The corresponding PE was 25.67/15.38/12.81 times, respectively. It was covered for the first time, and a “gain” rating was given.
Risk warning: risk of large fluctuations in raw material prices; risk of uncertainty about the progress of the IPO project; risk of downstream demand falling short of expectations.