Anhui Estone Materials Technology Co.Ltd(688733) (688733)
Introduction: in the previous report, we mainly focused on boehmite (currently accounting for 80% of the company’s revenue). This report mainly answers the recent concerns of the market, mainly involving: 1) how to see the competition pattern of boehmite; 2) how to see the growth space and advantages of the company’s second and third growth poles, namely Anhui Estone Materials Technology Co.Ltd(688733) ; 3) how to see the company’s valuation?
How to see the competition pattern of boehmite?
At present, Anhui Estone Materials Technology Co.Ltd(688733) the global share is nearly 50%, and China’s share is 70%. Thanks to the better competition pattern, boehmite’s gross profit margin is 40-50%, which is equivalent to the diaphragm. However, the market is worried that the pattern will deteriorate with the expansion of boehmite enterprises and the increase of new entrants (such as guoporcelain, Jidun, etc.). We think the pattern will not deteriorate because:
Products: product coverage (full coverage of high, middle and low-end markets, global uniqueness of nano high-end products) + product stability (accumulated experience in mass shipment, high consistency of mainstream products)
In terms of cost: it has been able to continuously reduce the cost, and the annual cost per ton has been reduced by more than 5% since 17 years. How to view the company’s second and third growth poles?
Anhui Estone Materials Technology Co.Ltd(688733) is not only a boehmite manufacturer, but also an inorganic non-metallic platform company, Focusing on the core advantages accumulated in inorganic powder (particle morphology control, magnetic foreign matter control, etc.), the two markets of power electronics and flame retardant materials have a total market space of nearly 30 billion in 25 years, which is higher than the space of 3 billion boehmite. At present, Anhui Estone Materials Technology Co.Ltd(688733) in electronics and flame retardant materials, the penetration rate is very low (less than 0.5%).
Electronic materials industry: it is expected to realize the domestic substitution of high-end products
Anhui Estone Materials Technology Co.Ltd(688733) products are mainly used in chip packaging + copper clad laminate filler + thermal conductive materials. At present, the market space is about 12 billion yuan, and it is expected to be 18 billion yuan in 25 years, with a compound growth rate of about 10%.
Anhui Estone Materials Technology Co.Ltd(688733) it mainly focuses on the high-end market. The company’s advantages lie in products Two levels of patents: at present, most indicators of Anhui Estone Materials Technology Co.Ltd(688733) are better than that of Lianrui (China’s first). Although there is still a gap with Japan’s electrification (the world’s first), the price of Anhui Estone Materials Technology Co.Ltd(688733) is half that of Japan’s electrification in similar products. In addition, from the perspective of capacity planning, it is estimated that the capacity of at least 20000 tons in 23 years is more than 4-5 times that of today.
Flame retardant material industry: it is expected to realize curve overtaking by relying on technical iteration
Anhui Estone Materials Technology Co.Ltd(688733) products are mainly used in wires and cables + automobiles + household appliances. At present, the Chinese market is about 10 billion, with a compound growth rate of 2%.
Anhui Estone Materials Technology Co.Ltd(688733) nanocomposite new flame retardant products have both performance and economic advantages. At present, the contribution to revenue is small, mainly because the company has small production capacity + slow replacement of new products, which needs to give the company time. In addition, from the perspective of capacity planning, the capacity is 2000 tons in 20 years and is expected to reach 110000 tons in 25 years.
How to view the company valuation?
As the demand for boehmite continues to exceed expectations and Anhui Estone Materials Technology Co.Ltd(688733) has expanded its leading edge in boehmite, we have raised the company’s 23-year profit forecast, which is expected to be RMB 100, 240 and 530 million in 21-23 years (the original forecast was RMB 110 / 2.5 / 400 million), corresponding to pe139, 59 and 26x. We give a 35 times valuation for Anhui Estone Materials Technology Co.Ltd(688733) 23 years, the target price is RMB 101.15, and continue to give the “buy” rating.
Risk tip: the production capacity is less than expected, the price of boehmite drops more than expected, the sales volume of electric vehicles is less than expected, and the price of aluminum rises more than expected. The calculation is subjective and the risk of stock price fluctuation
