Shanghai Nar Industrial Co.Ltd(002825) (002825)
Since its establishment, the company has mainly engaged in digital inkjet printing materials. After nearly 20 years, it has developed into the leader of digital inkjet printing materials in China, and has completed the accumulation of core technologies such as precision coating. In recent years, the company has steadily expanded horizontally and vertically on the basis of ensuring the leading advantage of digital jet printing materials in its main business. In terms of horizontal category expansion, the company has laid out new materials such as automotive functional film, multilayer optical and electronic functional film, fuel cell membrane electrode and so on closely around the coating process; In terms of vertical extension of the industrial chain, the company has arranged digital jet printing ink, calendering film and adhesive. We believe that the company is expected to become a leading functional membrane platform enterprise in China.
Digital printing materials: the company has a leading market share, and the industry concentration is expected to be further improved. As a leading listed company in the digital printing material industry, the company has obvious competitive advantages. In 2019, its main products accounted for about 25% of the Chinese market. With the epidemic situation and stricter environmental protection, the liquidation of small enterprises is accelerated, and the industry concentration is expected to be further improved. In addition, the company has planned three bases in Thailand, Nantong, Jiangsu and Fengcheng, Jiangxi, which will greatly enhance the company’s comprehensive competitiveness after completion.
Digital ink jet printing: the industry is growing rapidly, and the company is located in the first echelon in China. From 2015 to 2019, China’s digital jet printing ink market maintained a growth rate of more than 20%, and textile digital printing is an important and fast-growing application field. Compared with traditional dyeing and finishing and screen printing, textile digital printing meets the consumption upgrading trend of textile industry upgrading and terminal fashion, and ushers in a period of rapid development. The company’s subsidiary ink library is located in the first echelon of domestic production, and the revenue of digital inkjet printing ink in 2021h1 is 198 million yuan, a year-on-year increase of 90%.
Automobile protective film: the card position is in the blue ocean market, and the revenue is growing rapidly. Automobile protective film (PPF) is mainly used for paint protection of passenger cars, which can be divided into two types: invisible car clothes and automobile color changing film. We estimate that the potential market scale of PPF can reach 8.75 billion yuan. The company acquired PPF brand and established automobile protective film business department at the end of 2016. After three years of development, it has become a well-known brand and head enterprise in China, and its operating revenue has increased from only 2.1 million yuan in 2018 to 95.43 million yuan in 2020. 2 The PPF revenue of 021h1 company was 79 million yuan, with a year-on-year growth rate of 178.5%.
Dr. Hu Liqing has rich industrial experience in actively arranging fuel cell membrane electrodes. In April 2021, the company established NAR Zhongneng hydrogen power Co., Ltd. to enter the field of fuel cell membrane electrode production and further expand the functional membrane materials. Membrane electrode is the core component of fuel cell, and the technical barrier is high. The project leader, Dr. Hu Liqing, is a pioneer in China’s fuel cell industrialization and has profound industrial experience. The company plans to support advanced CCM production line and aims to become the largest membrane electrode R & D and manufacturing enterprise in China.
We predict that the company’s net profit attributable to the parent company in 2021 / 22 / 23 will be RMB 99 / 1.55/227 million and EPS 0.05% 67 / 1.06/1.55 yuan, corresponding to the current price of pe37 35 / 23.70/16.21 times. With reference to comparable companies, the company will give the company 20 times PE in 2023, and the target price is 31 yuan. We are optimistic about the company’s clear horizontal and vertical development ideas. Digital ink jet printing, automobile protective film and fuel cell film are fast-growing tracks, and the company is expected to become a platform enterprise of functional membrane materials. For the first time, give a “buy” rating.
Risk tip: the decline of outdoor advertising market exceeds expectations, the price of raw materials fluctuates sharply, and the construction progress of new projects is less than expected.
