The company is a leading photoinitiator enterprise. with the landing and release of the company's investment capacity and the development of new applications, it is expected that the company's photoinitiator performance will maintain rapid growth in the next few years, with a CAGR of 42.58% in 2021-2023. According to the valuation of PEG, 43 times PE will be given by PEG=1 in 2021, corresponding to the target price of 70 yuan, covering for the first time and giving a "buy" rating.
Optical initiator leading enterprises, high recognition of downstream customers. The company is the world's largest producer and supplier of photoinitiators with a market share of more than 30% in 2019 and has a large-scale production capacity of more than 10 kinds of photoinitiators, such as TPO, 1173, 907,369, DETX, ITX and so on. The company has long focused on the photoinitiator industry, after years of market hard work and continuous accumulation, the company's R & D and technical service capabilities, product quality, product line, stable supply capacity, brand and so on have been fully recognized by downstream customers. the top ten international light-curing coating companies and light-curing ink companies mostly use the company's photoinitiator products.
The market share is concentrated at the head, and the downstream demand is constantly expanding. From the supply side, the domestic photoinitiator industry continues to expand production in recent years, the market competition is more fierce, and the company continues to improve its market share at the bottom of the industry relying on competitive advantage. From the demand side, China's UV-curing technology has great application potential and market opportunities, and new application fields continue to emerge, such as pipe network repair, composite materials, automotive coatings, 3D printing and so on. With the development of UV-curing technology, more and more new UV-cured products will be developed to promote the healthy development of the industry.
The field of epitaxial layout photoresist is expected to fill the domestic gap. In August 2020, the company acquired a 100% stake in Dajing Xinliao, which has a mature talent team and management experience in the fields of electronic chemicals and semiconductors, as well as a base under construction. In September 2020, the company invested in Microcore New Materials and held a 12.12% stake in it. The main business of microchip new materials is the R & D, production and sales of KrF photoresist resins and monomers. The company makes every effort to promote the localization of photoresist in China, taking photosensitizer as the origin, opening up the upstream and downstream industry chain of photosensitizer and photoresist production, and is expected to realize the import substitution of photosensitizer, high-end photoresist and its supporting materials.
Risk factors: intensified market competition; sharp fluctuations in product prices; production capacity construction progress is not as expected.
Investment suggestion: with the landing and release of the company's investment capacity and the development of new applications, the company's photoinitiator performance is expected to maintain rapid growth in the next few years, with a CAGR of 42.58% in 2021-2023. According to the valuation of PEG, 43 times PE will be given by PEG=1 in 2021, corresponding to the target price of 70 yuan, covering for the first time and giving a "buy" rating.
