Triumph Science & Technology Co.Ltd(600552) (600552)
Relying on the group’s scientific research empowerment, new materials are about to take off:
Triumph Science & Technology Co.Ltd(600552) is positioned as the “display and new materials” platform in the “3 + 1” strategy by Kaisheng group. Under the background of the combination of production and research, it is expected to rely on the strong scientific research strength of Bengbu Institute to obtain more high-quality scientific research achievements. Take UTG glass R & D as an example: Triumph Science & Technology Co.Ltd(600552) jointly with Bengbu Institute, independently built and developed 30-70 micron UTG products produced in China and in the whole process. During the “14th five year plan” period, the company will be committed to building a larger scale applied material industry. New products with high added value and high-tech threshold will be an important construction and transformation direction of the company’s new material business in the future.
The potential of the company’s high value-added new materials is expected to be gradually released:
There are many kinds of new material products: Triumph Science & Technology Co.Ltd(600552) new material products mainly include zirconium materials, spherical quartz powder, nano barium titanate and rare earth polishing powder, as well as high-purity silica under construction. The downstream application of the company’s new material products is transformed and upgraded from traditional ceramics and refractories to high-tech threshold and high value-added products such as chips, integrated circuit packaging and biomedicine. The main operators of the new materials sector are Bengbu Zhongheng New Materials Technology Co., Ltd. (fused zirconia, zirconium silicate and spherical quartz powder) and Anhui Zhongchuang electronic information materials Co., Ltd. (nano barium titanate and rare earth polishing powder). Among them, Anhui Zhongchuang, which accounts for a higher proportion of high value-added products, has made steady progress.
The development of new materials focuses on “small and beautiful” and “domestic substitution”: the company’s fused zirconia products have been in the leading position in the industry, and are now continuing to tap the potential of high value-added products such as stable zirconium, nano composite zirconia, rare earth polishing powder, spherical quartz powder and high-purity silica. Most of the new materials mainly developed by the company have the characteristics of “small and beautiful”, high technical barriers, and the concept of “domestic substitution”. The production capacity is steadily expanded. Once it enters the downstream customer supply system, it will contribute a large profit elasticity. In particular, the high-purity silica project under construction of the company, whose products are synthetic and higher purity, can be used for high-end semiconductor production.
New material product benchmarking company: the company’s nano composite zirconia products and nano barium titanate can be benchmarked Shandong Sinocera Functional Material Co.Ltd(300285) ; Spherical quartz powder can be benchmarked Novoray Corporation(688300) ; High purity silica can be benchmarked Jiangsu Pacific Quartz Co.Ltd(603688) ; Rare earth polishing powder can be benchmarked China Northern Rare Earth (Group) High-Tech Co.Ltd(600111) .
Not only UTG, the new material business is more attractive: as a global leading manufacturer of UTG cover plates in China, the growth of its UTG business has been gradually recognized by the market. However, we believe that relying on the strong scientific research strength of Bengbu Institute, the development potential of the new materials business sector has not been fully recognized, especially some products with high technical content and added value, which have great growth space in the future. We maintained the company’s net profit attributable to the parent company for 21-23 years at RMB 235 / 343 / 423 million, and maintained the rating of “overweight”.
Risk tips: the market development of UTG business is not as expected, the R & D and construction of new material projects are not as expected, the risk of epidemic rebound and trade friction, the risk of asset and credit impairment, and the risk of exchange rate fluctuation.
