KINGFA(SH:600143) Donghai Securities·2025-11-20 11:24Investment Rating - The report assigns a "Buy" rating for the company, marking its first coverage [6]. Core Insights - The company has evolved from a modified plastics manufacturer to a global chemical new materials platform, successfully applying its products in cutting-edge industries such as AI servers, humanoid robots, and new energy vehicles [6]. - The modified plastics business remains a solid foundation, with a leading gross margin in the industry due to its integrated supply chain and material solutions [6]. - The company is well-positioned to benefit from domestic substitution and technological upgrades in the new materials sector, with significant growth potential in specialty engineering plastics and biodegradable plastics [6]. - The earnings forecast indicates a steady increase in EPS from 0.54 to 0.85 yuan from 2025 to 2027, with corresponding PE ratios decreasing from 35.01 to 22.16 [6]. Summary by Sections 1. Performance Overview: Healthy Profit Structure and Expected Profitability - The company has shown robust revenue growth, achieving 49.62 billion yuan in revenue in the first three quarters of 2025, a 22.62% year-on-year increase, and a net profit of 1.065 billion yuan, up 55.86% [6][17]. - The profit structure is now driven by sustainable growth areas such as automotive materials and high-end specialty engineering plastics, rather than relying on sporadic medical products [17]. 2. Integrated Supply Chain Builds Competitive Advantage in Modified Plastics - The modified plastics segment has consistently accounted for over 50% of revenue since 2020, with sales volume reaching 2.0908 million tons in the first three quarters of 2025, a growth of 18.16% [40]. - The company’s total production capacity for modified plastics is set to reach 3.72 million tons per year by the end of 2024, maintaining a leading position in the industry [40]. 3. "Domestic Substitution" and "Industry Upgrade" Drive New Materials Business - The new materials segment, including specialty engineering plastics and biodegradable plastics, is expected to grow significantly, with sales volume of 20,080 tons in the first three quarters of 2025, a 22.36% increase [6]. - The company is actively developing high-performance biodegradable plastics and specialty engineering plastics, which are crucial for emerging industries [6]. 4. Earnings Forecast and Valuation - The company’s revenue is projected to grow from 60.51 billion yuan in 2024 to 67.31 billion yuan in 2025, with a compound annual growth rate of approximately 14.62% from 2020 to 2024 [5][75]. - The report highlights a favorable valuation compared to peers, with an average PE of 44.74 and 30.10 for 2025 and 2026, respectively [75].