Evergreen Technology(SH:603125)2024-03-14 16:00Investment Rating - The report assigns an "Outperform" investment rating for Changqing Technology, with a target price range of 38.74 to 41.72 CNY based on a PE valuation of 26-28 times for 2024 [3][10]. Core Viewpoints - Changqing Technology is a leading player in the specialty monomers and additives segment, with new capacity investments expected to provide long-term growth opportunities [1]. - The company has demonstrated a compound annual growth rate (CAGR) of 21.07% in revenue from 2019 to 2022, and a CAGR of 35.03% in net profit during the same period [5][37]. - The fine chemical industry is anticipated to experience significant market growth, with relatively low competitive pressure for individual products [41]. Summary by Sections Company Overview - Changqing Technology focuses on the R&D, production, and sales of specialty monomers and additives for high polymer materials, achieving a revenue of 964 million CNY in 2022, up from 758 million CNY in 2021 [4][29]. - The company has established strong partnerships with several well-known enterprises, enhancing its product offerings and market position [6]. Financial Performance - Revenue and net profit forecasts for Changqing Technology are projected at 1.015 billion CNY and 203 million CNY for 2023, respectively, with further increases expected in the following years [4][78]. - The gross profit margin has remained stable, with a slight decrease in 2022 due to rising raw material costs, but overall profitability remains strong [24][39]. Market Potential - The fine chemical industry is expected to benefit from China's economic growth and industrial upgrades, with a focus on specialty chemicals that address specific downstream applications [41][66]. - The demand for ion exchange resins and PVC materials is projected to drive growth in upstream material requirements, particularly for Changqing's products [66][70]. Product and Capacity Expansion - The company currently has a production capacity of 35,000 tons per year for specialty monomers and plans to expand its capacity significantly by 2025, with investments totaling 1.215 billion CNY [7][33]. - Key products include divinylbenzene and α-methyl styrene, which are essential for various applications in the polymer industry [42][53]. Competitive Landscape - Changqing Technology operates in a market with relatively few competitors, allowing for stable profit margins and a strong market position [41][47]. - The company has developed advanced technologies that provide a competitive edge in the production of specialty monomers and additives [48][49].