Kaili Catalyst & New Materials (SH:688269)2024-03-20 16:00Investment Rating - The report assigns an "Accumulate" rating for the company, marking its first coverage in this regard [4]. Core Views - The company has a strong foundation in precious metal catalysts, benefiting from significant R&D and scale advantages, and is poised to gain from the trend of domestic production [4]. - The demand for precious metal catalysts is steadily increasing, with a notable shift towards domestic production as foreign manufacturers currently dominate the high-end market [4][5]. - The company’s product quality is on par with international standards, and it is actively expanding into new product areas, which is expected to drive future growth [4][5]. Summary by Sections 1. In-depth Research on Precious Metal Catalysts - The company has been deeply involved in the precious metal catalyst industry for over 20 years, leveraging its relationship with the Northwest Nonferrous Metal Research Institute for R&D [4][24]. - The company has developed a comprehensive range of products, including non-mercury PVC catalysts and high-end homogeneous catalysts, with significant production capacity planned [4][5]. 2. Market Demand and Domestic Breakthrough - The current domestic demand for precious metal catalysts is approximately 19,000 tons, with expectations for continued growth as new products are introduced [4][5]. - The company is well-positioned to benefit from the domestic market as it develops new catalysts and expands its production capabilities [4][5]. 3. Product Quality and New Product Launches - The company’s catalysts have achieved or are close to international advanced levels, targeting mid-to-high-end markets [4][5]. - New product lines, including non-mercury PVC catalysts and other innovative catalysts, are in various stages of development and commercialization [4][5]. 4. Financial Forecast and Valuation - The company is projected to achieve net profits of 115 million, 219 million, and 286 million yuan for the years 2023, 2024, and 2025, respectively, with corresponding PE ratios of 37, 19, and 15 times [4][5]. - Compared to industry peers, the company’s 2024 PE is significantly lower than the average, indicating potential for growth as new products are marketed [4][5].