DKEM(300842) Tianfeng Securities·2025-05-31 00:15Investment Rating - The report assigns a "Buy" rating for the company, with a target price of 54.31 CNY based on a PE of 20 for 2025 [4][6]. Core Viewpoints - The company has established itself as a leading supplier of photovoltaic conductive pastes, with a focus on low-silver and high-copper paste solutions, which are expected to drive growth in the coming years [3][13]. - The transition from PERC to N-type TOPCon technology in 2024 presents a significant opportunity for the company, as it has a first-mover advantage in developing conductive pastes for this new technology [2][34]. - The company's revenue is projected to grow significantly, with estimates of 164 billion CNY in 2025 and 210 billion CNY in 2027, alongside a steady increase in net profit [4][64]. Financial Performance - The company reported revenues of 96 billion CNY in 2023, with a year-on-year growth of 155%, and is expected to reach 154 billion CNY in 2024, reflecting a 60% increase [1][4]. - The gross margin has remained stable around 10%, with net profit margins showing fluctuations, expected to be 3.9% in 2023 and 2.2% in 2024 [1][4]. - R&D expenses accounted for 3.2% and 3.1% of total revenues in 2023 and 2024, respectively, indicating a strong commitment to innovation [1][4]. Market Position and Strategy - The company is positioned to benefit from the ongoing shift in the photovoltaic conductive paste market, where domestic manufacturers are gaining market share from international players, with a projected market share of 82% by 2024 for leading domestic companies [2][30]. - The introduction of high-copper paste solutions is part of the company's strategy to reduce costs and improve efficiency in the photovoltaic industry, which is under pressure to lower production costs [3][40]. - The company has developed a unique low-silver metallization solution that combines seed layer paste with high-copper paste, which is expected to enhance its competitive edge in the market [3][51].