SHIHUA(SH:688093) Jianghai Securities·2025-12-08 08:42Investment Rating - The report assigns a "Buy" rating for the company for the first time [1]. Core Views - The company, Suzhou Shihua New Materials Technology Co., Ltd., is recognized as a national-level specialized and innovative "little giant" enterprise, focusing on the research, production, and sales of functional materials [6][12]. - The company has maintained high growth in revenue and net profit, with a five-year CAGR of 26.96% for revenue and 27.84% for net profit from 2019 to 2024 [6][24]. - The company has established deep cooperation with major clients like Apple and Samsung, which enhances its market position and stability [6][20]. - The company has recently completed a fundraising of 590 million yuan to expand its optical film materials project, which is expected to significantly contribute to future growth [6][24]. Financial Forecast - Total revenue is projected to grow from 511.50 million yuan in 2023 to 1,923.41 million yuan in 2027, with a growth rate of 10.64% in 2023 and 55.36% in 2024 [5]. - Net profit attributable to shareholders is expected to increase from 193.46 million yuan in 2023 to 669.06 million yuan in 2027, with a growth rate of 4.36% in 2023 and 44.56% in 2024 [5]. - The company's EPS is forecasted to be 1.56 yuan in 2025, with a corresponding P/E ratio of 22.61 [5]. Company Overview - The company was established in 2010 and has developed a range of functional materials used in various industries, including consumer electronics and medical electronics [12][20]. - The company operates three manufacturing plants and has over 400 employees, with a strong presence in both domestic and international markets [12][20]. - The management team has extensive experience in the industry, contributing to the company's innovative capabilities and patent development [20][21]. Business Segments - The main business segments include functional electronic materials and high-performance optical materials, with the latter showing rapid revenue growth due to new project developments [29][39]. - The functional electronic materials segment has seen steady growth, while the high-performance optical materials segment is expected to contribute significantly to future revenues [29][39]. Market Trends - The global consumer electronics market is projected to grow from 788.23 billion USD in 2024 to 1,073.77 billion USD by 2032, driven by advancements in AI, IoT, and 5G technologies [53]. - The demand for high-end smartphones is increasing, with a notable shift towards premium devices, which is expected to benefit the company's functional materials [55][58].