First(603806) 华创证券·2024-09-23 22:36Investment Rating - The report maintains a "Recommend" rating for the company with a target price of 18.48 yuan, corresponding to a 2025 PE of 20x [1][10] Core Views - The company is a global leader in photovoltaic (PV) encapsulation film, with a market share of around 50% in the PV film industry [1][9] - The company is expanding its production capacity, with plans to increase its film production capacity to over 3 billion square meters by the end of 2024 [1][9] - The PV film demand is expected to grow significantly, with a CAGR of 29% from 2022 to 2026, reaching 7.84 billion square meters by 2026 [1][8] - The company's cost advantages, driven by economies of scale and process expertise, allow it to maintain a leading position in profitability [9][10] Company Overview - The company is a global leader in PV encapsulation film, with over 20 years of experience in the field [1][15] - The company's main revenue comes from its PV film business, which accounted for over 90% of its revenue in H1 2024 [1][15] - The company is expanding its production capacity in Vietnam, Hangzhou, and Suzhou, with plans to reach over 3 billion square meters of film production capacity by the end of 2024 [1][15] - The company has a strong R&D capability, allowing it to continuously upgrade its products to meet the evolving needs of the PV industry [9][15] Industry Analysis - The PV film industry is expected to see sustained growth, driven by the continuous increase in PV installations [1][8] - The demand for PV films is expected to reach 7.84 billion square meters by 2026, with a CAGR of 29% from 2022 to 2026 [1][8] - The industry is characterized by high visibility in medium- to long-term demand, with no disruptive technological changes expected in the near future [1][8] - The industry is also seeing product upgrades, such as the increased demand for POE-type films due to the rise in N-type battery penetration [1][8] Competitive Advantages - The company has a significant scale advantage, with a market share of around 50% in the PV film industry [1][9] - The company's cost advantages, driven by economies of scale and process expertise, allow it to maintain a leading position in profitability [9][10] - The company has a strong R&D capability, allowing it to continuously upgrade its products to meet the evolving needs of the PV industry [9][15] - The company's overseas production capacity matches the trend of leading module manufacturers expanding overseas, further strengthening its competitive advantage [55] Financial Projections - The company's revenue is expected to reach 21.647 billion yuan in 2024, with a year-on-year growth rate of -4.2% [2] - The company's net profit attributable to shareholders is expected to reach 1.836 billion yuan in 2024, with a year-on-year growth rate of -0.8% [2] - The company's EPS is expected to be 0.70 yuan in 2024, with a PE ratio of 20x [2] - The company's net profit is expected to grow significantly in 2025 and 2026, reaching 2.410 billion yuan and 3.155 billion yuan, respectively [2][10]