The “Double Improvement of Quality and Return” action plan highlights long-term development determination and maintains a “buy” rating
On February 27, 2024, the company issued the “Notice on the Action Plan for Improving Quality and Return”. The announcement stated that in the future, the company will: (1) focus on the main business and comprehensively build a platform company with various core innovative materials; (2) adhere to technological innovation and continuously strengthen the driving force of the company's development; (3) focus on shareholder returns and share the results of enterprise development; (4) standardize operations and continuously improve the level of corporate governance. This announcement highlights the determination and confidence of the company's management for long-term development. We maintain the company's profit forecast. We expect the company to achieve net profit of 235 million yuan, 442 million yuan, and EPS of 0.25, 0.47, and 0.66 yuan in 2023-2025. The current stock price corresponds to PE of 83.1, 44.3, and 31.4 times, maintaining a “buy” rating.
Focus on the main business and comprehensively build a pan-semiconductor materials platform company
The company focuses on innovative semiconductor materials business, and has laid out material products in three fields: process materials for semiconductor manufacturing (including CMP process materials, high-end wafer photoresists, etc.), semiconductor display materials (including yellow polyimide paste YPI, photosensitive polyimide paste PSPI, etc.), advanced semiconductor packaging materials (including semiconductor packaging PI, temporary bonding adhesives, etc.), involving more than 100 types of segmented material product models. The positioning of innovative material platform companies has been formed, and the leading domestic supply position for CMP polishing pads and YPI and PSPI products has been established. In addition, the company will also maintain the steady operation, optimization and upgrading of the printing and copying supplies business to provide a stable source of profit for the company.
Share buybacks are used for equity incentives/employee stock ownership, focus on shareholder returns, and share the results of enterprise development
The company has continued to pay cash dividends every year since its listing for 14 years, and has implemented a three-phase repurchase plan. The total amount of cash dividends accumulated up to the end of 2023 plus the payment amount for the first three installments of the repurchase plan was $894 million. Currently, the fourth phase of the company's repurchase plan is being implemented, and the total capital to be used for this repurchase is not less than RMB 150 million. The company attaches importance to the stability of corporate value in the secondary market, actively protects the interests of investors through share repurchases, stabilizes investors' investment expectations, and enhances investors' investment confidence in the company.
Risk warning: downstream demand falls short of expectations; capacity release falls short of expectations; technology research and development falls short of expectations; customer introduction falls short of expectations.