Manufacturer of functional coating composites, leading the adhesive material production capacity industry. The company was founded in April 2006 and listed on the Shanghai Stock Exchange in October 2017. The company is a manufacturer of functional coating composites, mainly engaged in R&D, production and sales of industrial adhesive materials, electronic and optical adhesive materials, and specialty paper. The company's products are widely used in architectural decoration, automobile manufacturing, automotive beauty, electronic and electrical product manufacturing, furniture manufacturing, stationery, packaging, aviation and high-speed rail, etc., in the fields of paint shielding, bonding, fixing, protection, conductivity, insulation, flame retardancy, etc. The company has leading production capacity in the adhesive materials industry, and has manufacturing bases in Jiangsu, Anhui, Zhejiang, Sichuan and Guangdong. By the end of 2023, Jiangsu Jinghua, a wholly-owned subsidiary of the company, had a production capacity of 56 million square meters of electronic adhesive materials, 18 million square meters of optical adhesive materials, 600 million square meters of industrial adhesive materials, and 47,000 tons of new chemical materials. Anhui Jinghua, a wholly-owned subsidiary of the company, had a production capacity of 30 million square meters of optical adhesive materials, and Zhejiang Jingxin, a wholly-owned subsidiary, had a production capacity of 35,000 tons of specialty paper.

Net profit after deduction in 2023 increased 620.10% year over year. With 2021-2024Q1, the company achieved operating income of 1.395 billion yuan, 1.414 billion yuan, 1.559 billion yuan, and 0.389 billion yuan, up 34.27%, 1.37%, 10.23%, and 32.70% year-on-year respectively, and realized net profit after deduction of 0.029 billion yuan, 0.008 billion yuan, 0.056 billion yuan, 0.021 billion yuan, and 0.021 billion yuan, respectively. 13.93%, down 73.27%, up 620.10%, up 223.17%. In 2023, the sharp increase in the company's performance was mainly due to the fact that, on the one hand, the company further strengthened comprehensive cost control, increased the construction of the company's collection platform, and effectively reduced the procurement costs of raw materials, thereby enhancing the profitability of products; on the other hand, the company's production capacity and efficiency were continuously improved through technical reform, effectively reducing energy consumption and operating costs, and increasing the profitability of products. In 2023, the company plans to pay 0.26 yuan (tax included) for every 10 shares. The total cash dividend is expected to be about 6.6796 million yuan, and the dividend payment rate is 11.81%.

The company's R&D investment continues to increase, and the domestic substitution process in the adhesive industry is accelerating. In 2021-2023, the company's R&D expenses were 61.7712 million yuan, 47.4088 million yuan, and 55.412 million yuan, respectively, up 57.45% year-on-year, down 23.25%, and 16.88% respectively. With the continuous increase in R&D investment by domestic enterprises and the acceleration of the domestic substitution process in the adhesive industry, China's adhesive industry started late. Initially, it mainly focused on the production of low-end products. The industrial concentration was relatively low, but with continuous process iterations and capacity upgrades, the market pattern is undergoing reshaping. Leading companies in the domestic adhesive industry are actively transforming to high value-added products and high-end direction. In particular, in the field of new energy industry and building decoration, domestic adhesive materials have achieved localized replacement for high value-added products. In the consumer electronics sector, the trend of domestic production replacing imports has also gradually emerged. In the field of 3C electronics, the company's folding OCA and other products have now been used by leading domestic mobile phone companies in the latest folding phones, successfully replacing domestic ones, and are in a leading position in the domestic industry.

Production capacity construction is progressing in an orderly manner, and resources are optimized and integrated. The company built the southwest production base with intelligent numerical thinking and established a wholly-owned subsidiary, Sichuan Jinghua, to improve production and operation efficiency and enhance market competitiveness. By the end of 2023, Sichuan Jinghua is under construction, and the company expects to complete construction in the second half of 2024. The company successfully completed the release of private projects in July 2023, and successively increased capital for the construction of fund-raising projects in October; by the end of 2023, the fund-raising project implemented by Anhui Jinghua had completed the main construction, and production capacity was gradually climbing, and the fund-raising project implemented by Jiangsu Jinghua had changed, retaining 83.82% of the original fund-raising project. The reduced production capacity will not affect sales and development of the existing market. The company will adjust production plans according to downstream customer demand orders; adding 29 million square meters of electronic and optical production per year Materials and products are mainly used in the fields of touch displays, automobiles, new energy, and consumer electronics. At the same time, in July 2023, the company began to acquire minority shareholders' shares in the subsidiary Kunshan Jinghua to further optimize and integrate industrial resources, deepen synergy, improve customer service capabilities and market response speed, and achieve the company's long-term sustainable development.

Risk warning: Project construction progress falls short of expectations, prices of raw materials and products fluctuate greatly, and macroeconomic decline.