Incident: The company released its 2023 annual report and 2024 quarterly report. In 2023, the company achieved revenue of 2,944 billion yuan, +17.74% year over year; net profit to mother was 407 million yuan, +36.37% year over year.
In the first quarter of 2024, the company achieved revenue of 782 million yuan, +17.57% year-on-year; realized net profit of 144 million yuan, +74.29% year-on-year.
Performance increased significantly year-on-year, and the semiconductor photoresist business bucked the trend. Benefiting from the replacement and introduction of the company's new products and the continued release of mature products, the company's semiconductor photoresist business bucked the trend in a sluggish global market environment. Specifically, in terms of electronic materials, the company's electronic materials business achieved revenue of 554 million yuan in 2023, an increase of 44.03% over the previous year. In terms of semiconductor photoresists, the company's semiconductor photoresist business achieved revenue of 210 million yuan in 2023, an increase of 14.13% over the previous year. In terms of display panel photoresists, the company's Beixu Electronics display panel photoresist business achieved sales revenue of 261 million yuan in 2023, an increase of 22.8% over the previous year. (2) In terms of special rubber additives, in the context of the gradual recovery of the tire market, the company's specialty rubber additives business has also grown. In 2023, the company's production of specialty rubber additives reached 135,000 tons, sales volume was 1.41 million tons, and revenue of 2.28 billion yuan was achieved, an increase of 9.08% over the previous year.
The company maintains a relatively rapid R&D progress, and will continue to release a variety of photoresists. (1) In terms of semiconductor photoresists, the company added 7 new products to achieve the first mass production application in 2023, covering categories such as high-resolution KrF photoresists, deep UV negative photoresists, and chemically amplified I-line photoresists, which are expected to continue to be released in 2024. ArF photoresists have been mass-produced and shipped by leading domestic chip companies, and will enter the gradual release stage. A number of KrF and I-line photoresists have been verified by leading domestic chip companies and storage manufacturers, and will be gradually released in the second quarter of 2024. (2) In terms of display panel photoresists, the 2023 4 Mask high-sensitivity photoresist products continue to expand new customers and expand mass sales to meet all layers of the Array process. Currently, shipments of this new product continue to increase; in terms of AMOLED photoresists, the company's high-resolution photoresists and low-temperature photoresists have achieved mass production and sales for major domestic customers, respectively. (3) In terms of photoresist resins, the 2023 TFT-LCD Array half-tone photoresist phenolic resin and high-resolution photoresist phenolic resin production test have passed the relevant photoresist formulation performance tests and LCD panel production line tests, and have been mass-produced; OLED Array photoresist phenolic resin has been developed, and mass production test products are being verified on the production line; several G/I line phenolic resins are in the pilot/large test stage. Some have successfully passed the formulation test and have entered the customer promotion stage; advanced I-line cutting phenolic resins It is in the development phase, and some are in the pilot phase.
Profit forecast and investment suggestions: The company's semiconductor photoresist R&D progress has exceeded expectations, various photoresist products are about to be released, and the position of leading domestic semiconductor photoresist manufacturer is further stabilizing.
As the scale of the domestic semiconductor industry grows and the process of autonomy progresses, the rubber additives business is booming, and photoresist products continue to be released, and the company's performance is expected to grow further. We forecast net profit for 2024-2026 to be 490 million, 590 million, and 740 million, respectively, corresponding to the current PE of 33 times, 27 times, and 22 times, respectively, maintaining the “buy” rating.
Risk warning: downstream demand falls short of expectations, project commissioning schedule falls short of expectations, customer verification falls short of expectations, market competition intensifies, etc.