Red Avenue New Materials(603650) Shanghai Securities·2025-03-11 02:37Investment Rating - The report assigns an "Accumulate" rating for the company for the first time [2][11]. Core Views - The company is a global leader in new materials, focusing on electronic materials, automotive/tire specialty materials, and fully biodegradable materials. It is actively developing its electronic materials business, particularly semiconductor photoresists and display panel photoresists, to address the localization of key materials. The gradual release of production capacity in the electronic materials sector and the large-scale introduction of new photoresist products are expected to drive strong growth in operating performance [2][18]. Summary by Sections Company Overview - The company operates in three main sectors: electronic materials, automotive/tire specialty materials, and fully biodegradable materials. It aims to solve the localization of key materials in the semiconductor and display fields while maintaining a strong focus on specialty rubber additives [18][19]. Electronic Materials - The company is building a platform company in electronic materials, with a focus on photoresists. The semiconductor photoresist business is gradually ramping up, with sales expected to reach 128 million yuan in the first half of 2024, a year-on-year increase of 54.43% [3][44]. The display panel photoresist segment is also growing, with the company being the largest domestic supplier, achieving a market share of 25.9% in the first half of 2024 [4][63]. Specialty Rubber Additives - The company is the largest supplier of specialty materials for tires globally, with a production volume of 135,000 tons in 2023, representing a year-on-year growth of 16.7%. This segment remains the dominant source of revenue, accounting for 77.7% of the company's main business income [5][28]. Fully Biodegradable Materials - The company has introduced BASF's PBAT technology, becoming a leader in the biodegradable materials sector. However, due to market oversupply, the PBAT production facility is temporarily halted in 2024 [5][10]. Financial Forecast - The company is expected to achieve revenues of 3.278 billion yuan, 3.750 billion yuan, and 4.370 billion yuan for 2024, 2025, and 2026, respectively, with year-on-year growth rates of 11.37%, 14.40%, and 16.53%. The net profit attributable to shareholders is projected to be 572 million yuan, 656 million yuan, and 768 million yuan for the same years, with growth rates of 40.57%, 14.69%, and 17.19% [11][13].