Red Avenue New Materials(603650) 民生证券·2024-05-29 23:30Investment Rating - The report maintains a "Recommended" rating for the company, with a current price of 30.90 CNY and projected PE ratios of 36, 30, and 24 for the years 2024, 2025, and 2026 respectively [1]. Core Insights - The company signed a cooperation agreement for a semiconductor chip advanced polishing pad project with an investment of 300 million CNY, which is expected to generate annual sales of approximately 800 million CNY upon reaching full production [1]. - The company's performance in Q1 2024 exceeded market expectations, with significant revenue contributions from specialty rubber additives and electronic chemicals, totaling 5.97 billion CNY and 1.56 billion CNY respectively [1]. - The company is advancing its semiconductor materials strategy by establishing a production base for semiconductor chip polishing pads, which are crucial materials in semiconductor processing [1]. - The domestic CMP polishing pad market is expected to benefit from the company's technological advancements, as it aims to break the oligopoly currently held by foreign companies [1]. Summary by Sections Financial Performance - In Q1 2024, the company reported revenues of 5.97 billion CNY from specialty rubber additives and 1.56 billion CNY from electronic chemicals, with a total revenue of 290.6 million CNY from biodegradable materials [1]. - The projected revenues for 2024, 2025, and 2026 are 2,944 million CNY, 3,634 million CNY, and 4,195 million CNY respectively, with growth rates of 17.7%, 23.4%, and 15.5% [5][8]. - The net profit attributable to the parent company is expected to be 516 million CNY, 615 million CNY, and 760 million CNY for 2024, 2025, and 2026 respectively, reflecting growth rates of 27.0%, 19.1%, and 23.7% [5][8]. Market Position - The company is positioned as a leader in the domestic semiconductor photoresist market, with several products set to ramp up production in 2024 [1]. - The global semiconductor materials market is projected to grow by nearly 7% in 2024, reaching 74 billion USD, with the domestic market showing a significant demand gap for CMP polishing pads [1]. Investment Outlook - The company is expected to benefit from both the existing CMP polishing pad market and the expansion of domestic wafer manufacturers, providing a dual advantage [1]. - The report forecasts a steady increase in net profit and revenue, indicating a positive outlook for the company's financial performance in the coming years [5][8].