Shengquan Group(SH:605589) Guoxin Securities·2025-06-17 06:51Investment Rating - The report assigns an "Outperform" rating for the company, marking it as the first rating given [5]. Core Insights - The company is a leading player in the synthetic resin industry, particularly in phenolic and furan resins, with significant production capacity and technological advancements [1][14]. - The high-end electronic resin segment is rapidly expanding, expected to become a second growth curve for the company due to high margins and strong customer retention post-certification [2][57]. - The company has a stable and clear shareholding structure, with significant confidence shown by executives through share purchases [20][21]. Financial Forecast and Valuation - Projected revenues for 2025-2027 are estimated at 121.43 billion, 136.98 billion, and 155.35 billion CNY, respectively, with net profits of 11.29 billion, 13.87 billion, and 16.34 billion CNY [3][4]. - The current stock price corresponds to a PE ratio of 18.75, 15.25, and 12.92 for the years 2025-2027, indicating a reasonable valuation range of 28.80 to 29.74 CNY, suggesting a premium of 6.67% to 10.15% [3][4]. Company Overview - The company specializes in synthetic resins and composite materials, with a strong focus on high-performance applications across various industries, including aerospace, electronics, and construction [14][34]. - The company has developed advanced biomass utilization technologies, with a significant project in Daqing expected to contribute to profitability as operational rates increase [2][19]. Business Analysis - The synthetic resin segment is the core business, with a production capacity of 65,000 tons/year for phenolic resin, positioning the company among the top globally [1][34]. - The demand for casting resins is expected to rise due to the transformation of manufacturing industries towards high-end, precision, and environmentally friendly products [45][49]. - The company is well-positioned to benefit from the increasing demand for high-quality casting materials in the automotive and wind energy sectors [49][51]. Market Trends - The electronic resin market is experiencing growth driven by advancements in AI and high-frequency applications, with the company poised to capitalize on this trend [57][59]. - The overall resin industry is shifting towards high-performance and environmentally friendly products, with the company leading in R&D capabilities [56][66].