Quechen Company(605183) 甬兴证券·2024-12-19 11:41Investment Rating - The report assigns a "Buy" rating for the company, indicating a positive outlook based on its fundamentals and expected performance relative to market benchmarks [5][90][99]. Core Views - The company is a leader in the precipitated silica industry, with significant growth potential through high-end transformation and expansion of production capacity [4][5]. - The demand for high-dispersion silica, particularly in green tires, is expected to rise due to the automotive industry's growth and the trend towards sustainable production [4][5]. - The company is actively expanding its global footprint and enhancing its technological capabilities to support high-end product development [4][5]. Summary by Sections 1. Leader in Precipitated Silica, High-End Transformation Growth Expected - The company is the largest producer of precipitated silica in China and one of the largest globally, with a complete industrial chain from raw materials to final products [15][16]. - The company has maintained a compound annual growth rate (CAGR) of approximately 11.03% in revenue and 11.21% in net profit from 2019 to 2023, with a significant increase in net profit expected in 2024 [26][28]. 2. Green Tires on the Rise, Precipitated Silica Industry Prosperity Continues - The demand for precipitated silica is expected to grow, particularly in the tire industry, where it can replace carbon black and reduce rolling resistance by about 30% [4][54]. - The company is well-positioned to benefit from the ongoing trend of domestic substitution in the precipitated silica market, as the industry is expected to consolidate [41][43]. 3. Global Layout and Technological Leadership Support High-End Transformation - The company has a production capacity of 330,000 tons per year, with plans to increase capacity by an additional 100,000 tons through new projects [56][58]. - The company has established a strong technological platform, focusing on R&D to develop various high-end silica products, including those for oral care and biomass-derived silica [71][76]. 4. Profit Forecast and Investment Recommendations - The company is expected to achieve net profits of approximately 503 million, 613 million, and 711 million yuan for the years 2024, 2025, and 2026, respectively, with corresponding price-to-earnings ratios of 15x, 12x, and 10x [5][90]. - The report emphasizes the company's potential for growth driven by the expansion of high-value-added products and the successful implementation of new projects [5][90].