The Zhitong Finance App learned that Haitong Securities released a research report that from a global perspective, the global semiconductor industry recovered moderately in the first half of 2024, and strong demand for data centers and artificial intelligence drove the rapid development of the AI server and memory chip market. At the same time, demand for consumer electronics such as downstream semiconductor terminals such as smartphones and computers warmed up, and the global integrated circuit industry returned to a growth cycle. OLED materials benefited from the recovery in downstream consumer electronics demand and the continuous increase in penetration rate, and the LCD materials business gradually recovered; the PCB industry resumed growth, and high-frequency high-speed materials gradually achieved import substitution; competition in the carbon fiber market intensified, and the company's operating income and net profit declined.

Semiconductor materials benefited from a recovery in downstream demand and accelerated import substitution, and overall operating income and net profit achieved positive growth. In the first half of 2024, the company achieved an average year-on-year growth rate of 15.94% in operating income and an average year-on-year growth rate of 15.65% in net profit to mother. From a global perspective, the global semiconductor industry recovered moderately in the first half of 2024. Strong demand for data centers and artificial intelligence drove the rapid development of the AI server and memory chip market. At the same time, demand for downstream semiconductor terminals such as smartphones and computers warmed up, and the global integrated circuit industry returned to the growth cycle. Looking at the domestic market, in the first half of 2024, the Chinese semiconductor market gradually recovered, the industry gradually removed inventory, and the operating rate of major wafer manufacturers increased steadily.

OLED materials have benefited from the recovery in downstream consumer electronics demand and the continuous increase in penetration rate, and the LCD materials business is gradually recovering. In the first half of 2024, the company achieved an average year-on-year growth rate of 12.12% in operating income and an average year-on-year growth rate of -83.26% in net profit to mother. As the application of OLED in the downstream field continues to expand, the market size continues to increase. At the same time, domestic panel manufacturers are actively expanding production of 8.6-generation high-generation OLED production lines. As a key upstream link in the industrial chain, OLED organic materials are rapidly increasing in domestic substitution and market demand, and the performance of domestic OLED materials companies has achieved rapid growth in 2024H1.

The PCB industry has resumed growth, and high-frequency high-speed materials have gradually been replaced by imports. According to Shengyi Technology's 2024 semi-annual report, the global PCB output value remained stable year-on-year in the first quarter of 2024, ending the previous continuous downward trend and marking the arrival of a turning point for the industry. Q2 is expected to increase 4.6% year-on-year. In the first half of 2024, the company achieved an average year-on-year growth rate of 9.76% in operating income, and an average year-on-year growth rate of -73.57% in net profit to mother.

Competition in the carbon fiber market intensified, and the company's operating income and net profit declined. According to Baichuan information, as of June 30, the carbon fiber market price was 91.25 yuan/kg, down nearly 3.5 yuan/kg from the beginning of the year, or 3.69%. The average market price for the first half of 2024 was 94.37 yuan/kg. In the first half of 2024, the company achieved an average year-on-year growth rate of -15.66% in operating income, and an average year-on-year increase in net profit to mother of -48.33%

Investment advice. Haitong Securities believes that with the gradual recovery of downstream demand and the rapid development of the high-end application market, leading domestic companies are expected to prioritize the benefits of import substitution. It is recommended to focus on new material companies Lianrui New Materials (688300.SH), Jacques Technology (002409.SZ), Walter Gas (688268.SH), China Porcelain Materials (300285.SZ), Xinzhoubang (300037.SZ), Jinhong Gas (688106.SH), etc.

Risk warning. Downstream development applications fall short of expectations; risk of increased competition in the industry.