NBTM(SH:600114) Guotai Junan Securities·2024-07-22 00:01Investment Rating - The report initiates coverage with a rating of "Buy" [1][2] - The target price is set at 16.75 CNY, with the current price at 13.79 CNY [1][2] Core Insights - The company is positioned as a leader in the foldable screen hinge market, benefiting from the rapid growth of the consumer electronics sector [2][5] - The report forecasts EPS for 2024, 2025, and 2026 to be 0.67 CNY, 0.99 CNY, and 1.31 CNY respectively, with a reference PE of 25x for 2024 [2][53] - The foldable phone industry is maturing, with major manufacturers releasing new products, leading to a projected acceleration in market growth [2][19] Summary by Sections 1. Industry Layout and Development - The company is a leading player in the powder metallurgy industry, with three main business segments: P&S, SMC, and MIM [15][17] - The company has made strategic acquisitions to enhance its capabilities in the MIM market, positioning itself for rapid growth alongside the foldable phone market [15][39] 2. Foldable Phone Market Growth - The foldable phone market is entering a phase of explosive growth, with significant increases in shipments, particularly from Huawei [19][21] - The report notes that the average price of foldable phones has decreased to below 600 USD, which is expected to drive further adoption [24][29] 3. Key Components and Technology - Hinges are identified as a critical component in foldable phones, with the MIM process being essential for producing high-quality parts [37][39] - The company has developed capabilities in MIM parts and modules, enhancing its competitive position in the market [39][42] 4. Financial Forecast and Valuation - Revenue projections for the company are 49.37 billion CNY, 63.75 billion CNY, and 82.46 billion CNY for 2024, 2025, and 2026 respectively, reflecting growth rates of 27.9%, 29.1%, and 29.3% [53][54] - The report utilizes relative valuation methods, comparing the company to peers in the magnetic materials and MIM sectors [55][56]