Core Viewpoint - The global flat panel display mask market is expected to grow significantly, driven by increasing demand for larger screens and high-resolution technologies, with the market size projected to reach approximately 7 billion yuan in 2024 and 7.55 billion yuan in 2025 [1][7][9]. Group 1: Industry Definition and Classification - The mask plate, also known as photomask, is a critical component in microelectronics manufacturing, serving as a carrier of graphic designs and process technology [2][3]. - Photomasks are categorized into flat panel display masks and semiconductor masks, with flat panel display masks further divided by panel size and display technology [3]. Group 2: Current Industry Development - The flat panel display mask market is experiencing continuous growth due to rising average TV sizes, demand for large-screen mobile devices, and advancements in technologies like LTPO [7][9]. - The global flat panel display mask market is projected to reach approximately 7 billion yuan in 2024, an increase of 500 million yuan from 2023, and is expected to grow to about 7.55 billion yuan in 2025 [7][9]. Group 3: Industry Chain - The upstream materials for the flat panel display mask industry include mask substrates, optical films, chemical reagents, and packaging materials, with mask substrates playing a crucial role in product precision and quality [11]. - The downstream applications include manufacturing TFT-LCDs, AMOLEDs, and other display technologies, with end products spanning televisions, monitors, smartphones, and automotive displays [11]. Group 4: Competitive Landscape - China is the largest panel manufacturing base globally, accounting for over 60% of global capacity, but the domestic mask production capacity is relatively weak, with major international brands like Photronics and HOYA dominating the high-end market [13][16]. - Key domestic players in the flat panel display mask sector include Qingyi Optoelectronics, Luwei Optoelectronics, and others, with Qingyi and Luwei being the leading companies in high-generation and high-precision mask segments, respectively [13][16]. Group 5: Key Companies - Qingyi Optoelectronics reported a revenue of 827 million yuan and a net profit of 120 million yuan in the first three quarters of 2024, with significant contributions from quartz masks [16][18]. - Luwei Optoelectronics achieved a revenue of 603 million yuan and a net profit of 121 million yuan in the same period, being the only domestic company with a full-generation production line from G2.5 to G11 [20][22]. Group 6: Industry Development Trends - The demand for large-size and high-precision masks is increasing, indicating that these factors will be crucial for the development of China's flat panel display mask industry [24]. - The market share in the flat panel display mask sector is concentrated, and there is significant room for improvement in the localization rate of high-precision products [24].

Investment Rating - The report maintains a Neutral rating for Anji Microelectronics Technology and raises the target price to CNY175 from CNY157 [3][5]. Core Insights - Anji Microelectronics reported a revenue of CNY1,835 million for 2024, reflecting a year-on-year growth of 48%, driven by strong performance in photoresist solvent, which grew by 79% year-on-year [1][4]. - The company's gross margin improved to 58.5%, up 2.6 percentage points year-on-year, attributed to scale advantages and product mix improvements [1]. - Earnings for 2024 were reported at CNY534 million, a 33% increase year-on-year, but fell short of consensus estimates due to higher asset impairment losses and a reduction in government subsidies [1]. Summary by Sections 2024 Performance - Revenue reached CNY1,835 million, exceeding Bloomberg consensus by 1% [1]. - Photoresist solvent sales increased by 79% year-on-year, while CMP slurry sales grew by 44% [1]. - Gross margin was 58.5%, 0.4 percentage points above consensus [1]. 2025 Forecast - Expected sales and earnings growth of 24% and 28% year-on-year, respectively, driven by continued localization trends [2]. - Potential for increased CMP slurry penetration in key clients, with current penetration below 50% for the second and third largest clients [2]. - Anticipated better revenue growth in photoresist solvent due to low current penetration of around 20-25% [2]. Valuation and Target Price - The new target price of CNY175 is based on a 33x multiple of the 2025F EPS of CNY5.3, slightly above the historical average P/E of 32x [3][26]. - The stock currently trades at 33x 2025F P/E, indicating a modest upside of 1.2% from the closing price of CNY172.91 [5][26]. Financial Projections - Revenue projections for FY25 are set at CNY2,275 million, with net profit expected to reach CNY682 million [4][10]. - Normalized EPS is forecasted to grow by 27.7% in FY25, reaching CNY5.29 [10].