\u3000\u3000 Novoray Corporation(688300) (688300)
China’s leading silicon powder, spherical silicon powder and alumina led the growth, and was rated as “buy”
The company focuses on the field of silicon micro powder, and has the collaborative advantages of copper clad laminate and epoxy plastic sealing material industry chain. The company upgraded from angular silicon powder to spherical silicon powder, and expanded the field of new products such as spherical alumina. The average price and gross profit margin are expected to rise further. The quality of the company’s operation is stable. Compared with the manufacturers that belong to the upstream core materials of basic electronic components, the company has a wide range of downstream application fields, scattered customer structure and steady growth. In 2020, the per capita operating income and net profit reached 110.7/304 million yuan respectively. The initial purchase price of the parent company is expected to be RMB 1.08/2 billion, with a corresponding net profit of RMB 1.08/2 billion in 2023 and a corresponding net profit of RMB 1.08/2 billion in 2027.
Copper clad laminate (CCL) and epoxy plastic sealer have both stimulated the demand for spherical silicon powder, and the company has broken through the overseas blockade
In the field of copper clad laminates, as high-end copper clad laminates are dominated by Japanese funded manufacturers, the upstream silicon powder supporting supply system is relatively closed. In 2019, the market share of three Japanese funded spherical silicon powder enterprises was as high as 70%. The high-end development of copper clad laminate drives the increase in the quantity and price of silicon powder as its filler. We predict that the total market volume of spherical alumina for copper clad laminate in China is expected to reach 4.92 billion yuan in 2025. The company’s spherical silicon powder product parameters have reached the level of benchmarking with overseas manufacturers. With the breakthrough made by domestic manufacturers in the field of high-end copper clad laminates, it is expected to accelerate the localization of upstream spherical silicon powder materials, and the company is expected to benefit. The field of epoxy plastic sealant is similar. Chinese epoxy plastic sealant manufacturers have achieved independent research and development, relying on Chinese spherical silicon powder to achieve cost reduction and high-end product expansion. The company is expected to stand out by virtue of price and location synergy.
Looking forward to the subdivision application of spherical alumina and accelerating its entry into emerging markets
Thermal interface materials and thermal conductive engineering plastics are the main applications of spherical alumina. New energy vehicle batteries, electronic controls and motors all use thermal interface materials such as thermal conductive materials and thermal conductive adhesives, which is expected to drive the demand for spherical alumina fillers. The production of spherical alumina mostly adopts the sintering process, and the pelletizing rate and purity are the consideration indicators. Relying on the self-made equipment of the core link, the company actively develops the equipment. The number of patents related to equipment and devices accounted for 39.3% from 2010 to 2022. The performance and energy production scale of spherical alumina products continue to catch up with the leading companies.
Risk tips: the expansion of spherical silicon powder is less than expected, the introduction of spherical alumina customers is less than expected, and the demand for downstream copper clad laminate and epoxy plastic sealant is declining.
