Triumph Science & Technology Co.Ltd(600552) (600552)
Serialization of new material products, enhancement of added value and broadening of industrial chain
The company's new material business is based on zirconium and based on zirconium products, expanding product series, such as stable zirconium, active zirconium, spherical quartz powder, barium titanate and polishing powder; At the same time, the application field has realized the transformation and upgrading from traditional ceramics and refractories to high value-added electronic application materials such as chips, integrated circuit packaging and biomedicine, with excellent product added value and market prospect. 21h1 new material subsidiary realized a net profit of about 60 million yuan (non parent), yoy + 31%. We believe that the new material sector of the company is at the leading level in the industry as a whole. With the expansion of industrial products, the introduction of downstream electronic and chip customers and the continuous improvement of capacity utilization, the performance of the new material sector is expected to continue to grow. We believe that the new material business is expected to be poor and the company's valuation is expected to be reshaped.
Based on zirconium based materials, medium and high-end transformation is in progress
Zirconium based products are mainly made in Zhongheng new materials, a subsidiary. At present, it has an annual production capacity of 24000 tons of zirconia and 30000 tons of zirconium silicate. The revenue scale is about 800 million yuan and the net interest rate is about 6%. The production, sales and capacity utilization of zirconium silicate have been increasing in recent three years. We believe that it is mainly due to the acceleration of national industrial upgrading and the increase of application scenarios. In addition, the company's nanocomposite zirconia products have passed the customer certification. This product is a key application material in the electronics and chip industry. The company's customers in the electronics and chip industry are gradually introduced, which is expected to contribute to stable revenue and profits in the future.
Electronic grade materials are gradually introduced into customers, and the revenue scale / net profit margin can be increased
The company's electronic grade materials mainly include spherical quartz powder, barium titanate, polishing powder, etc, At present, it has 6000 T / a spherical quartz powder (7200 T / A in the future), 2000 t / a barium titanate and 2000 t / a CMP (3500 tons in the future), the proposed high-purity silica for semiconductors is 5000 tons / year. Among them, spherical quartz powder has successfully passed the review of many high-end customers and become a new profit growth point. There is a strong demand for domestic substitution of high-purity silica, and the downstream is mainly used in the field of photovoltaic quartz crucibles and semiconductors. The company is about to realize a key step from technology to industrial production It is estimated that the future contribution profit is considerable, or up to 60 million yuan. With the capacity launch of high value-added products and the introduction of corresponding customers, we believe that the company's new materials sector is expected to quickly usher in a double rise in revenue / net interest rate.
Gaocheng long term is expected to come and maintain the "buy" rating
Relying on the traditional display module business, the company drives the business development and introduction of new materials UTG and powder products. We believe that in the field of UTG, the company has strong control over the upstream core raw materials, and its business can be compared with Corning in the growth period to a certain extent. The UTG produced by the company is expected to become the core component in the next technology iteration of the consumer electronics sector, At the same time, there is a large expectation gap in the new material business. To sum up, we raised the company's EPS from 21 to 23 to 0.25/0.44/0.74 yuan (the previous value was 0.25/0.43/0.73 yuan) and CAGR + 67% from 21 to 23. Referring to comparable companies, we gave the company a peg valuation of 0.7 times, corresponding to the target price of 21 yuan, and maintained the "buy" rating.
Risk tip: the uncertainty risk of downstream market, the production capacity of UTG phase II is lower than expected, the profitability is lower than expected due to the significant increase of UTG supply, the customer expansion of new material business is lower than expected, the stock price has risen more recently and there have been stock price changes.
