Event description
The company released its semi-annual report in 2023, achieving an income of 980 million yuan (year-on-year-5.1%), an attributable net profit of 65 million yuan (year-on-year-29.0%), and an attribution deduction of 51 million yuan (year-on-year-36.6%). Among them, Q2 achieved revenue of 500 million yuan (year-on-year-10.3%, month-on-quarter + 2.6%), net profit of 44 million yuan (year-on-year-39.4%, month-on-month + 119.5%), and non-net profit of 36 million yuan (year-on-year-46.5%, month-on-month + 136.6%).
Event comment
The company is the leader of functional coating composite materials, expanding horizontally and longitudinally to open the development boundary. The company's main products are divided into functional film materials, electronic grade adhesive materials, polymer film materials, thermal management composites and film packaging materials, used in consumer electronics, new displays, new energy vehicles, household appliances, ceramic capacitors and other key fields. The company continues to expand new categories, focusing on OCA adhesive and coating, precision release film, upstream PET base film, self-made glue and other aspects, horizontal and vertical expansion, continue to enhance the company's core competitiveness.
Consumer electronics is slowly recovering, focusing on improving opportunities in the second half of the year. Since 2023, the demand for terminal consumer electronics has slowly recovered. Revenue from electronic grade adhesive materials, functional film materials, and film packaging materials has changed-3.9%, + 3.0%,-22.0%, and gross profit margin has changed by + 2.7 pct,-1.7 pct, and-6.3 pct. Orders and profits in the smartphone supply chain have picked up due to rising component prices and falling channel inventory levels. More importantly, emerging manufacturers are more flexible and willing to accept new market opportunities. Consumer electronics manufacturers mostly launched new products in the third quarter, and their sales are more seasonal. The annual National Day, Christmas, New Year's Day, Spring Festival and other festivals are the peak sales season for consumer electronics products. Relevant consumer electronics manufacturers often produce and shop goods in advance in preparation for the arrival of the above peak sales season. Downstream demand is expected to improve in Q3.
Projects under construction continue to move forward, and there is a broad space for the future. The company raises funds through IPO and fixed increase, and invests in a number of projects. at present, the OCA fund-raising project and PET base membrane line 1 have been successfully put into production, precision release film coating, functional tape, polarizer protective film, PET base film 2gamma line 3 and other projects are in the process of promotion, and the follow-up will gradually put into production and increase the company's profits.
OCA optical adhesive and precision release film have a wide space for domestic substitution. OCA optical adhesive products have high added value, and the precision release film is mainly used for OCA optical adhesive, MLCC and polarizer. According to the demand of OCA downstream smartphone, tablet computer, PC, TV, car display, wearable device and other fields, the global OCA adhesive market space will be 27.7 billion yuan in 2021, and the corresponding OCA release film market space will be 2.93 billion yuan. With the switch from 4G to 5G, the rise of wearable devices, and the rapid improvement of the permeability of new energy vehicles, the global consumption of MLCC will maintain rapid growth. It is estimated that from 2021 to 2025, the global market space for MLCC release film will increase from 26.5 billion yuan to 36.1 billion yuan; in 2021, the global market demand for polarizer will be 510 million square meters, corresponding to 9.18 billion yuan for polarizer release film market.
The company is in the leading position in the field of new adhesive materials and functional films. The release of OCA glue and the localization of high-end release films open the space for future development. The net profit vested in 2023-2025 is expected to be 2.2 billion RMB 3.9 billion RMB. Maintain a "buy" rating.
Risk hint
1. the recovery of downstream demand is not as expected.
2. The progress of the new project is lower than expected.