FRD(SZ:300602)2025-05-27 12:23Investment Rating - The report does not explicitly state an investment rating for the company Core Viewpoints - The company has raised a total of 2.07 billion yuan through equity financing since its listing, while the actual controller has cashed out over 300 million yuan, with only 140 million yuan distributed as dividends [1] - The actual controller's recent agreement to transfer shares is seen as an attempt to attract strategic investors and optimize the shareholding structure, despite the company's stock price fluctuations [1][8] - The company has a long-standing partnership with Huawei, with sales to Huawei accounting for approximately 17% of total revenue in 2024 [12][15] Summary by Sections Company Overview - The company specializes in the research, design, production, and sales of electromagnetic shielding materials, thermal management materials, base station antenna components, protective functional components, and lightweight materials [11] - The company has been a supplier to Huawei since 1997, with significant sales in various sectors including mobile phones, laptops, servers, and new energy vehicles [12] Financial Performance - The company's revenue has shown a compound annual growth rate (CAGR) of 13.9% from 2019 to 2024, with Q1 2025 revenue growth at 14.7%, totaling 1.18 billion yuan [16][17] - The main revenue contributors are thermal management materials, electromagnetic shielding materials, and lightweight materials, which accounted for 37%, 26%, and 14% of revenue in 2024, respectively [20] Market Trends - The demand for the company's products is driven by the growth in consumer electronics, communication, and new energy sectors, with revenue shares of 38%, 27%, and 35% in these areas in 2023 [15] - The AI server liquid cooling business is gaining attention, with the market for liquid cooling servers expected to grow at a CAGR of 46.8% from 2024 to 2029, reaching a market size of 16.2 billion USD by 2029 [26] Profitability and Capital Operations - Despite revenue growth, the company's profit margins have not kept pace, with a significant drop in gross margins observed since 2019 [32] - The company has engaged in frequent capital operations, raising concerns about potential conflicts of interest and the effectiveness of these transactions [37][38] - The company has been criticized for its inability to generate sufficient cash flow from operations, relying heavily on capital markets for funding [76][78] Competitive Landscape - The company faces increasing competition in the thermal management and electromagnetic shielding markets, with a low industry concentration and numerous players [62] - The company holds a market share of less than 10% in the thermal materials sector, indicating room for growth but also highlighting competitive pressures [63] Shareholder Returns - The company has distributed only 140 million yuan in dividends since its listing, while the actual controllers have cashed out over 300 million yuan through share reductions [84]