20230903-国海证券-瑞联新材-688550.SH-公司动态研究_二季度业绩环比改善_看好显示材料景气修复_12页_886kb

Summary of GuoHai Securities Report on Ruilian New Materials (688550)

The report provides a "Buy" recommendation for Ruilian New Materials (688550) based on its analysis of the company's financial performance, market position, and future prospects. Here is the key analysis:

Company Overview:
Ruilian New Materials is a key player in display materials, with expertise in规模化研发生产 OLED and液晶材料. The company has established partnerships with global clients like Merck and国内 firms, and is actively expanding into医药CDMO and electronic chemicals sectors. Its stock is rated as an initial "Buy" coverage.

Financial Performance:

• In 2023 H1, revenue declined 3134% YoY but increased 56.6% MoM, and net profit dropped 6383% YoY but reduced 26.58% MoM. Q2 2023 showed significant improvement with revenue and net profit环比increasing by +24.86% and +214.55% respectively, driven by panel industry demand recovery, as evidenced by DSCC data showing a 14% increase in TFT investments from Q1 2023.
• Factors affecting performance include downward pressure from consumer electronics downturn, leading to reduced profitability and slimmer margins this year.
• Negative growth in 2022 (-3%), but strong projected growth of 36% and 25% for 2024 and 2025 based on estimates, with net profits forecasted at 17.5, 29.6, and 38.6 billion CNY respectively.

Investment Rationale:

• Display materials market is expected to rebound in 2023 and beyond due to terminal demand repair, which will likely drive sustained improvement in the company's profitability.
• The company has a multi-product strategy, with products such as semiconductor photoresist precursors showing rapid growth, and risks like new plant construction progressing well.

Valuation:

• Based on forecasts, the fair PE ranges from 29x (2023) to 13x (2025), supporting a "Buy" rating, with a target PE of 17x for 2024 and 13x for 2025.

Key Risks:

• Potential delays in policy implementation, project scaling, new capacity contributions, raw material price volatility, or broader economic slowdown. Other risks include environmental policy changes and economic downturns.

The report concludes with growth potential and a strong position in the global supply chain, recommending investment considering future expansion in electronic materials.