SUNMUN TECHNOLOGY(SZ:300522) Tianfeng Securities·2024-02-22 16:00Investment Rating - The report assigns a "Buy" rating to the company with a target price of 12.9 CNY per share, based on a reasonable valuation of 22 times earnings for 2024 [89]. Core Insights - The company, established in 2001, specializes in the research, production, and sales of nano coloring materials, functional nano materials, specialty additives, and electronic chemicals, making it a leading service provider in the domestic color and functional nano materials market [1]. - The company has seen significant revenue contributions from its coating-related products, which accounted for nearly 70% of total revenue in the first half of 2023, followed by fiber-related products contributing over 20% [3]. - The company is actively expanding its product categories, including strategic projects like "photoresist pigment dispersion" and "SMA high-performance resin," which have shown promising results [1][3]. Company Overview - The company was listed on the Shenzhen Stock Exchange's Growth Enterprise Market in 2016 and has since expanded into specialty additives through acquisitions, such as the purchase of Kaimen Additives in 2020 [1]. - The company operates four major production bases, focusing on various applications in coatings, textiles, medical protection, and electronic chemicals [5]. Financial Performance - In 2022, the company's coating business generated revenue of 460 million CNY, with a year-over-year decline of 15.6%, while the first half of 2023 saw revenue of 225 million CNY, down 5.67% year-over-year [51]. - The company anticipates significant revenue growth from new production capacities, with projections indicating revenues of 687 million CNY, 1.134 billion CNY, and 1.646 billion CNY for 2023, 2024, and 2025, respectively [89]. Product Development and Market Trends - The company is focusing on environmentally friendly products, with a strong emphasis on water-based and low-VOC coatings, aligning with national policies promoting green development in the coatings industry [22][23]. - The market for water-based color pastes in China reached approximately 4.842 billion CNY in 2022, with a compound annual growth rate of 12.33% from 2016 to 2022, indicating robust demand for sustainable products [23]. Strategic Initiatives - The company has established strategic partnerships in the renewable energy sector, including collaborations with Zhongbei Communication and Suzhou Qingtai New Energy, to develop photovoltaic and energy storage systems [67]. - The company is also advancing into the zinc-nickel battery sector, aiming to leverage its expertise in nano materials for energy storage applications [93].