Report Industry Investment Rating No relevant content provided. Core Views - The company's convertible bond, Dinglong Convertible Bond, has a fundraising of 910 million yuan. After deducting issuance fees, it will be used for the industrialization project of 300 tons of KrF/ArF photoresist per year, the project of a domestic industrial base for key upstream raw materials of optoelectronic semiconductor materials, and the replenishment of working capital. It is expected to be listed on April 23, 2025, with a listing price above 130 yuan [1]. - The company has successfully expanded from printing and copying consumables to semiconductor materials. With high R & D intensity, the company's semiconductor business has a gross profit margin above 60% and is rising steadily, and the comprehensive gross profit margin has rapidly increased to over 45%. As revenue grows, profitability has also improved rapidly [2]. - The company is accelerating R & D to achieve a platform - based layout of semiconductor materials. In the future, the localization rate of semiconductor materials in China will increase. According to Wind's consensus forecast, the company's expected归母 net profits in 2024 and 2025 are 507 million yuan and 690 million yuan respectively, corresponding to PEs of 55.33X and 40.67X [3]. - The company's valuation is at a medium level in the past 5 years, with good stock price elasticity and high institutional attention. The convertible bond has a general parity and good bond - bottom protection [4]. Summary by Directory I. Convertible Bond Clause Analysis - The issuance scale of the convertible bond is 910 million yuan, with a term of 6 years. The initial conversion price is 28.68 yuan. The dilution rate of full conversion to the company's A - share total share capital is 3.38%, and to the non - restricted tradable shares is 4.36%. The conversion period starts from October 9, 2025, to the maturity date (April 1, 2031). The original shareholder placement ratio is 71.10% [10]. - The 6 - year coupon rates of the convertible bond are 0.20%, 0.40%, 0.80%, 1.50%, 1.80%, and 2.00% respectively, which are comparable to the average level of recently issued convertible bonds. The redemption price at maturity is 110 yuan. The bond has an AA rating for both the issuer and the bond itself, and there is no guarantee. The additional terms are standard. As of April 21, 2025, the conversion parity is 104.32 yuan, and the pure - bond YTM is 2.44%, indicating good bond - bottom protection [11][12]. II. Underlying Stock Fundamentals - The company is a privately - owned enterprise with a general equity concentration. As of September 30, 2024, Zhu Shuangquan and Zhu Shunquan are the controlling shareholders and actual controllers, holding a total of 29.71% of the company's shares [13]. - The company has transformed from printing and copying consumables to semiconductor materials. In the first three quarters of 2024, the company achieved sales revenue of 2.425 billion yuan, a year - on - year increase of 29.54%. The revenue of optoelectronic semiconductor materials and chips reached 1.086 billion yuan, accounting for 45%, while the revenue of printing and copying general consumables was 1.322 billion yuan, with a relatively stable scale but a decreasing proportion [13][14]. - Benefiting from the increasing proportion of semiconductor materials, the company's gross profit margin has been rising year by year. The gross profit margin of printing and copying general materials fluctuates between 25% - 30%, while that of semiconductor materials has been above 60% and reached nearly 70% in Q3 2024. The current comprehensive gross profit margin is above 45% [17]. - The company's R & D investment is high, with the R & D expense ratio increasing from 10% to 12% in the past three years. It has broken foreign monopolies in multiple semiconductor material fields and formed a rich product matrix [18]. - The global semiconductor material market is expected to reach over $87 billion by 2027, and the domestic market is growing faster. However, many key semiconductor materials are still dominated by foreign companies, and the localization rate of semiconductor materials in China will increase in the future [25]. - The company has become a leading domestic CMP polishing pad manufacturer. It has also achieved mass production of CMP polishing fluid and is accelerating capacity construction. In the display material field, it has broken the monopoly of Japanese and Korean enterprises and achieved domestic leading supply. High - end semiconductor photoresist and advanced packaging materials are under R & D, and the mass - production plan of semiconductor photoresist is in progress [27]. - The company's printing and copying consumables business is developing steadily. In 2024, the company's profitability increased rapidly, with the expected归母 net profit ranging from 490 million yuan to 530 million yuan, a year - on - year increase of 120.71% - 138.73% [28]. III. Analysis of Convertible Bond Fund - Raising Projects - The company's convertible bond fundraising of 910 million yuan will be used for the industrialization project of 300 tons of KrF/ArF photoresist per year (with an investment of 804 million yuan and a planned use of 480 million yuan of the raised funds), the project of a domestic industrial base for key upstream raw materials of optoelectronic semiconductor materials (with an investment of 235 million yuan and a planned use of 170 million yuan of the raised funds), and the replenishment of 260 million yuan of working capital [35][36]. - The 300 - ton KrF/ArF photoresist industrialization project is to build a production line in Qianjiang Jianghan Salt Chemical Industrial Park, mainly for 12 - inch wafer manufacturing in advanced processes, with a planned construction period of three years. The project of a domestic industrial base for key upstream raw materials of optoelectronic semiconductor materials is to research and produce key upstream raw materials for semiconductor process materials and semiconductor display materials, with a planned construction period of two years [35].