Incident: On August 21, 2024, the company released its 2024 semi-annual report. In the first half of 2024, the company achieved revenue of 2.122 billion yuan, +16.03% year over year; net profit to mother 0.16 billion yuan, -27.45% year over year; deducted non-net profit of 0.109 billion yuan, -9.08% year on year. Among them, Q2 achieved revenue of 1.202 billion yuan in a single quarter, +23.79% year over month, +30.51% month on month; net profit to mother 0.109 billion yuan, -27.08% year on year, +115.11% month on month; after deducting non-net profit of 0.072 billion yuan, +16.94% year over year and +94.50% month on month.
Sales of major products rebounded month-on-month in the second quarter of 2024, and the prices of some products declined slightly: the company achieved sales volume of 0.0192, 0.0259, 0.0174 million tons of new energy materials, optical film materials, and electronic materials, respectively, -1.89%, +43.42%, and +51.25% month-on-month. The overall sales volume of major products rebounded in the second quarter; prices: prices of new energy materials, optical film materials, and electronic materials were 0.02, 0.0116, and 0.0177, respectively Million yuan/ton, -9.78%, +7.32%, and -22.44% month-on-month. Prices of some products declined in the second quarter. Among electronic materials, products such as bismaleimide resins and active ester curing agent resins have stable quality performance and obvious competitive advantages, and quickly occupy the incremental market; however, the epoxy resin industry has entered a period of concentrated capacity expansion, market competition is intense, price differentiation has intensified, and overall profitability is under pressure.
The company has many projects under construction, and the company can be expected to grow. As of the 2024 mid-term report, the company's projects under construction are about 1.925 billion yuan, including multiple production capacities in the new energy sector, electronic materials, and optical film materials, including the gradual construction of multiple optical film projects that can be used as MLCC release substrates and polarizer substrates, ultra-thin polypropylene film production capacity of about 3,000 tons, and an annual output of 20,000 tons of electronic materials for high-speed communication substrates. Many of these products can be replaced by domestic production. It is expected to gradually be completed and put into operation between 2025 and 2026, and it is expected to take the lead in seizing the high-end market in the long term Optimistic about the company's growth.
Investment advice: The company is a leading manufacturer of optical film materials in China. At the same time, it has laid out a variety of high-end resins to fill the domestic supply gap and has strong growth potential. We expect the company to achieve operating income of 4.897/5.956/6.829 billion yuan in 2024-2026 and achieve net profit of 0.393/0.545/0.684 billion yuan. The corresponding PE is 14.29/10.29/8.20 times, respectively, and maintain the “gain” rating.
Risk warning: Market demand falls short of the expected risk; the company's new production capacity falls short of the expected risk; competition in the same industry intensifies the risk