Investment Rating - The report assigns a "Buy" rating to the company, Universal New Materials International (6616.HK), with a target price of HKD 7.31, indicating a potential upside of 106.5% from the current closing price of HKD 3.54 [4][8]. Core Insights - The company is a leading domestic producer of pearlescent materials, demonstrating excellent growth and profitability. Its main products include pearlescent materials and synthetic mica, with applications in industrial coatings, plastics, automotive coatings, and cosmetics. The company has shown rapid revenue growth, with a CAGR of 30.54% from 2019 to 2024, and a projected revenue of HKD 1.649 billion in 2024, representing a year-on-year growth of 55.0% [8][12]. - The global pearlescent materials market is steadily expanding, with a market size of RMB 23.5 billion in 2023 and a CAGR of 14.1% from 2016 to 2023. The Chinese market accounts for 27.5% of the global market, with a projected growth to RMB 126.5 billion by 2030 [32][34]. - The company possesses strong competitive advantages, including production cost optimization through technology, proprietary core technology patents, and a mature sales channel that provides strong bargaining power. The ongoing overseas acquisitions are expected to further enhance the company's performance and mark a deeper level of globalization [8][64]. Financial Forecasts - Revenue projections for 2025-2027 are HKD 21.94 billion, HKD 27.71 billion, and HKD 33.08 billion, with growth rates of 33.1%, 26.3%, and 19.4% respectively. Net profit forecasts for the same period are HKD 3.40 billion, HKD 4.57 billion, and HKD 5.95 billion, with growth rates of 40.4%, 34.4%, and 30.2% respectively [8][71]. - The company is expected to maintain a gross margin of approximately 53.0% in 2024, with a slight increase projected in subsequent years due to product structure optimization and supply chain synergies [25][70]. Market Dynamics - The pearlescent materials market is characterized by a shift towards high-end products, particularly synthetic mica-based pearlescent materials, which are in high demand due to their superior optical properties compared to traditional organic/inorganic pigments. The automotive and cosmetics sectors are driving this demand, with a CAGR of 38.0% and 19.5% respectively from 2016 to 2023 [42][51]. - The company is actively expanding its production capacity, with a new facility expected to come online in 2024, which will increase its annual production capacity to 30,000 tons of pearlescent materials [15][16]. Strategic Initiatives - The company is pursuing an acquisition strategy, including a significant deal to acquire Merck's surface solutions business for EUR 665 million, which is expected to enhance its global footprint and product offerings [64][66]. - The integration of the acquired business is anticipated to yield synergies in production capacity, sales channels, and technology, further solidifying the company's market position [66][68]. Conclusion - The report highlights the company's robust growth trajectory, strong market position, and strategic initiatives aimed at enhancing its competitive edge in the pearlescent materials industry, making it a compelling investment opportunity [4][8][12].
环球新材国际（06616）：护城河优势凸显，外延式并购开启发展新篇章