Incidents:
The company released its report for the first quarter of 2024. In 2024Q1, it achieved revenue of 119 million yuan, a year-on-year increase of 27.30%, and a decrease of 2.82% month-on-month; achieved net profit of 06 million yuan, all of which turned losses into profits over the same period last year.
Comment:
The optical film R&D and production capacity is excellent, and the product matrix is constantly being expanded and upgraded. The company is mainly engaged in R&D, production and marketing of ITO conductive films, and customized R&D and processing services for related functional films. The profitability of 2024Q1 has improved over the same period. Based on the design and development capabilities of complex optical film systems, as well as core technologies such as precision coating, precision bonding, and magnetron sputtering, the company has achieved self-manufacturing of major raw materials such as IM anti-fog film and PET high temperature protective film, and vertically integrated the industrial chain to achieve cost optimization. Focusing on touch display applications, the company continues to increase investment in R&D. The product line includes conductive films, optical films, optical adhesives, and supporting raw materials, etc., and is gradually expanding and upgrading application scenarios in the downstream market.
Dimming conductive films & optical films improve the driving experience, and future automotive business growth can be expected. The company's dimming and conductive film products cover the three technologies of PDLC, EC and SPD. The mass-produced dimming conductive film is used in car awnings, side windows, rearview mirrors, etc., to insulate and cool down, automatically adjust glass transmittance, reduce glare, and reduce potential driving safety hazards. The company's 2A/3A optical film can be widely used in automotive displays, folding screen phones and other electronic consumer products, LCD TVs, electronic photo frames, etc., to increase contrast and improve outdoor visibility. Currently, it is being tested in small batches to cooperate with client certification. As product verification continues to pass, the company's automotive business is expected to become an important growth pole for the company.
Deeply cultivate and touch the materials industry and expand the product matrix to achieve performance growth. The company is deeply involved in the touch display materials industry. It has core technology, mainly magnetron sputtering coating, and the ability to improve magnetron equipment. The product range is constantly rich. The folding-resistant OCA optical adhesive has completed early development and process verification, and is in the process of client-side certification samples; the optical adhesive for curved screens has completed trial mass production and is being certified by the client. As the product range continues to be enriched, there is plenty of momentum for the company's performance growth.
The first coverage gave it an “increase in holdings” rating: The company has strong technical implementation capabilities and expanded various products to achieve performance growth. The revenue for 2024-2026 is expected to be 5.52, 6.63, and 810 million yuan, respectively. The corresponding net profit to mother is 0.49, 0.85, and 122 million yuan, respectively, and the corresponding PE is 59, 34, and 24 times, respectively.
Risk warning: Competition in the industry intensifies, and downstream demand, profit forecasts and valuations fall short of expectations