DKEM(SZ:300842) Huachuang Securities·2024-04-08 16:00Investment Rating - The report gives a "Recommended" rating for the company, with a target price of 93.57 CNY based on a 16x PE for 2024 [31][48]. Core Insights - The company is a leader in photovoltaic silver paste, benefiting from the rapid penetration of N-type technology, which is expected to drive significant growth in silver paste demand and profitability [35][48]. - In 2023, the company achieved a revenue of 9.603 billion CNY, a year-on-year increase of 154.94%, and a net profit of 386 million CNY, marking a turnaround from losses [48]. - The N-type battery technology requires higher silver paste consumption compared to P-type, with expected silver paste demand reaching 7,501 tons in 2024, a 16% increase year-on-year [48]. Summary by Sections Company Overview - The company is positioned as a leading player in the photovoltaic silver paste market, with a focus on N-type silver paste technology [48]. - The company has successfully implemented LECO silver paste technology, which is expected to enhance its competitive edge and profitability [36][48]. Financial Performance - The company forecasts net profits of 588 million CNY, 718 million CNY, and 829 million CNY for 2024, 2025, and 2026 respectively, with corresponding PE ratios of 12, 10, and 9 [32][48]. - The revenue growth is driven by the increasing demand for N-type batteries, which have a higher silver paste consumption rate compared to P-type batteries [35][48]. Market Dynamics - The report highlights that the silver paste market is expected to grow significantly, with the total market space projected to reach 43.8 billion CNY in 2024, a 22% increase year-on-year [48]. - The competitive landscape is becoming more concentrated, with the top three companies holding approximately 80% of the global market share for silver paste [48]. Technological Advancements - The company is leveraging its technological advancements in LECO silver paste to capture market share and improve margins [36][48]. - The transition to N-type technology is anticipated to enhance the overall profitability of the silver paste segment due to higher processing fees associated with N-type products [54][48].