Incident Overview

24 Revenue for the first three quarters was 0.356 billion yuan, yoy +79.91%, net profit to mother 0.13 billion yuan, yoy +131.7%, after deducting non-return net profit of 0.116 billion yuan, yoy +187.89%; gross profit margin 66.39%, yoy+2.79pct, net profit margin 36.43%, yoy+8.14pct

24Q3 revenue 0.111 billion yuan, yoy +95.53%, qoq -15.81%, net profit to mother 0.037 billion yuan, yoy +204.03%, qoq -23.9%, net profit after deducting 0.033 billion yuan, yoy +378.97%, qoq -23.67%, gross profit margin 66.8%, yoy+6.37pct, qoq+0.11pct, net profit margin 33.68%, yoy+12.02pct, qoq -3.57pct.

The first three quarters of 24 benefited from a recovery in consumer electronics demand+an increase in OLED penetration. The first three quarters of 24 were affected by a recovery in terminal consumer electronics demand and a continuous increase in OLED penetration. Demand from downstream customers continued to grow, and the company's OLED terminal materials sales revenue increased sharply year-on-year. It is expected that subsequent OLED manufacturers will maintain high utilization rates, while the scale effect of the company's new products will gradually increase, and it is expected that growth will continue to increase in the future.

The OLED penetration rate continues to increase, and continuous R&D of new products+customer expansion helps the company grow rapidly 1) The OLED industry trend is obvious. The OLED penetration rate in all downstream segments has increased markedly. Global mainstream panel manufacturers have increased their AMOLED layout, and OLED materials, as an important part of the OLED industry chain, the overall localization rate is still low, and domestic replacement is urgent; 2) The company has always focused on R&D innovation. The company invested 0.044 billion yuan in R&D in the first three quarters of 24, an increase of 15.8% over the previous year. Currently, the company Red Stable mass production and supply of Prime materials and Green Host materials; emphasis has been placed on promoting client-side verification testing of new products Red Host materials, Green Prime materials, and Blue Light series materials, which are progressing well. 3) In terms of customer development, the company has entered the supply chain system of many well-known domestic panel manufacturers such as BOE, Huaxing Optoelectronics, Hehui, Tianma, and Xinli and achieved mass production, forming a clear first-mover advantage and good market reputation in the industry. Furthermore, while maintaining stable mass production and supply from leading OLED panel manufacturers, the company actively develops new customers, verifies and tests various products on the customer side, and strives to gradually achieve full coverage of domestic OLED panel manufacturers. In addition, the company is actively expanding other customers such as silicon-based OLEDs, and various materials are being verified and tested on clients such as Vision and Nanjing Guozhao, which are progressing well. In the context of the continuous increase in OLED penetration rate and domestic replacement of OLED materials, the company attaches importance to R&D and customer development, and is expected to grow rapidly in the future.

Investment advice

Taking into account the uncertainty in the macro environment, we expect the company's net profit to be 1.84/3 for 2024/2025/2026.

0.3/0.537 billion yuan (previously estimated net profit to mother in 2024/2025/2026 was 0.205/0.354/0.575 billion yuan). According to the 2024/10/24 closing price, PE was 45/25/15 times, maintaining a “buy” rating.

Risk warning

Customer growth falls short of expectations, downstream demand falls short of expectations, risk of technology iteration, and risk of untimely updates of research and usage information.