Key points of investment:
Backed by the Northwest Nonferrous Metals Institute, it is deeply involved in the precious metals catalysis business, and has remarkable R&D and scale advantages. The company is one of the early pioneers of the domestic precious metal catalyst industry. Since its establishment, the company has been deeply involved in the industry for more than 20 years, and has developed into a company with integrated collaborative development such as R&D and production of precious metal catalysts, R&D and engineering of catalytic application technology, and recycling and reuse of waste catalysts. In terms of R&D, the company relies on the superior human resources of the Northwest Nonferrous Metals Research Institute, has multiple R&D platforms, and has successively undertaken various key projects such as national science and technology research projects, national key industry revitalization and technological transformation projects, and has strong R&D capabilities.
Precious metals are used in a wide range of fields, and the trend of localization is strong. Catalytic reactions are the foundation of reactions and are widely used in many fields. Among them, precious metal catalysts are mostly used in reactions such as hydrogenation, oxidation, coupling, and polymerization, covering basic chemicals, fine chemicals (pharmaceuticals, new materials, pesticides, dyes, etc.), environmental protection, new energy, etc. According to Allied Market Research (joint market research) and the company's prospectus, the current domestic demand for precious metal catalysts is about 19,000 tons. In the future, as the scale of new products expands, the catalyst market is expected to continue to increase. Judging from the industry pattern, foreign catalyst manufacturers still have a monopoly on the global high-end precious metal catalyst market and occupy most of the high-end chemical market in China. However, with the continuous technological breakthroughs of domestic manufacturers, breakthroughs in localization are imminent, and domestic enterprises represented by companies are expected to benefit first.
Product quality is comparable to overseas, and R&D supports breakthroughs in new fields. The quality and performance of some of the company's catalytic materials have reached or are close to the international advanced level, and the target market is mainly in the middle and high-end fields. At the same time. The company implements the “application generation, R&D generation, and reserve generation” technology research and development policy, with industrialization and engineering as research goals. PVC mercury-free catalysts have been mass-produced and sold on a large scale, new catalysts such as PDH and ethylene glycol are already in the industrial expansion or batch trial production stage, and new product fields are continuously being developed.
Fundraising and fixed growth projects support long-term development. The company's fund-raising projects have been gradually put into operation, and fixed increase projects are expected to be implemented. The products cover PVC mercury-free catalysts, high-end homogenous catalytic materials, non-precious metal catalysts, fuel cells, etc. Among them, the total fund-raising project will add 75 tons of catalysts, 2 tons of homogenous catalysts, 700 tons of carbon-borne catalysts, 1,300 tons of alumina catalysts, and 2,000 tons of waste precious metal catalysts; the total fixed increase project will add 3,000 tons of PVC gold-based mercury-free catalysts, 3,500 tons of waste gold-based mercury-free catalysts, 15 tons of platinum catalysts, 2,500 tons of copper catalysts, and 1,500 tons of nickel-based catalysts. The size of the company is expected to grow rapidly, and there is plenty of room for long-term development.
Profit forecast and valuation: The company's 2023-2025 net profit is estimated to be 1.15, 2.19, and 286 million yuan, corresponding to the closing price on March 20, 2024. PE valuation is 37/19/15 times, respectively. Comparable companies such as Catalyst, Dingjide, and Guiyan Platinum were selected. The average PE of comparable companies was 36/23/11 times. The company's PE in 24 was significantly lower than the industry average. Considering that the company's new catalysts still require market development, under the principle of prudence, coverage was given an “gain” rating for the first time.
Risk warning: Precious metals prices continue to decline; new projects fall short of expectations; there are new entrants to the industry, and the competitive landscape is deteriorating.