Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected relative price increase of over 20% compared to the market benchmark within the next six months [6][19]. Core Insights - The company's photovoltaic film business is currently under pressure due to declining prices in the photovoltaic industry chain, but it remains a leading player globally with significant competitive advantages [2][3]. - The electronic materials segment is experiencing strong growth, particularly in photoresist dry film, which is projected to enter a phase of increased volume and profitability [4]. - The company is expanding its overseas production capacity, particularly in Vietnam and Thailand, which is expected to benefit from the rapid growth in emerging market demand for photovoltaic products [3]. Financial Performance and Forecast - For the first half of 2025, the company anticipates a net profit of 473 million yuan, a year-on-year decrease of 49.05%, primarily due to a decline in sales prices of photovoltaic films [1]. - Revenue projections for 2025 to 2027 are estimated at 15.6 billion yuan, 22.0 billion yuan, and 27.3 billion yuan respectively, with corresponding P/E ratios of 23.5, 16.7, and 13.4 [6][8]. - The company's gross profit margin is expected to improve, with overseas photovoltaic film gross margins significantly higher than domestic margins [3].

Investment Rating - The investment rating for the company is "Buy" [6][19]. Core Views - The company is currently facing short-term performance pressure due to a downturn in the photovoltaic industry, but its electronic materials and functional film businesses are growing rapidly, creating a second growth curve with clear long-term growth momentum [2]. Financial Summary - Total revenue for 2023 is projected at 22,589 million, with a year-on-year growth of 19.7%. However, a decline of 15.2% is expected in 2024, followed by a recovery with growth rates of 10.1%, 10.6%, and 12.9% in the subsequent years [4]. - Net profit attributable to the parent company is forecasted to be 1,850 million in 2023, with a decrease of 29.3% expected in 2024, before rebounding to 1,691 million in 2025, and reaching 2,890 million by 2027 [4]. - Earnings per share (EPS) is estimated to be 0.71 in 2023, dropping to 0.50 in 2024, and then increasing to 1.11 by 2027 [4]. - The return on equity (ROE) is projected to decline to 8.0% in 2024, before recovering to 14.7% by 2027 [4]. Target Price - The target price for the company is set at 17.00 yuan, based on a price-to-earnings (PE) ratio of 25 times the estimated EPS for 2025 [12]. Business Growth Drivers - The company has established itself as a leader in the domestic photosensitive dry film market, with significant sales growth expected in 2024, projected to reach 15,933.90 million square meters, a year-on-year increase of 37.97% [12]. - The functional film materials business, including aluminum-plastic films and RO support films, is also expected to accelerate growth, driven by increasing demand in the new energy vehicle and water resource treatment markets [12].

Core Insights - Foster (603806) reported a total revenue of 19.147 billion yuan for 2024, a year-on-year decrease of 15.23%, and a net profit attributable to shareholders of 1.308 billion yuan, down 29.33% [1] - The company maintains a competitive edge in the photovoltaic film sector, but the photovoltaic backsheet business has significantly declined, while the electronic materials segment has emerged as a new growth driver [1][4] Photovoltaic Materials Business - The photovoltaic materials segment faced severe challenges in 2024, with photovoltaic film sales reaching 138.906 million square meters, an increase of 43.61%, and revenue of 9.878 billion yuan, up 3.79% [4] - Conversely, photovoltaic backsheet sales were only 6.778 million square meters, a decline of 18.26%, with revenue dropping to 414.7899 million yuan, down 43.53% [4] - The decline in the backsheet business highlights the company's vulnerability in certain segments of the photovoltaic supply chain, despite its leading position in photovoltaic film [4] - The global photovoltaic installation capacity growth has slowed, and the company plans to expand its product range and overseas capacity to address diverse battery and module technology needs [4] Electronic Materials Business - The electronic materials segment emerged as a highlight in the 2024 financial report, with photosensitive dry film sales reaching 73.665 million square meters, a growth of 35.83%, and revenue of 275.3727 million yuan, up 26.92% [5][6] - The PCB market is expected to enter a new growth cycle due to the acceleration of AI applications and the development of automotive intelligence [5][6] - The company has established a dual-base layout in East and South China and has formed partnerships with leading PCB companies, enhancing its competitive position in the electronic materials market [6] Functional Film Materials Business - The functional film materials segment showed steady performance, with aluminum-plastic film sales reaching 5.606 million square meters, a growth of 35.54%, and revenue of 58.9002 million yuan, up 26.52% [7] - The company is focusing on differentiated product development for RO support films, gaining recognition from downstream customers and achieving bulk sales [7] - Despite the steady growth, the functional film materials segment remains relatively small and contributes limitedly to overall performance, necessitating increased R&D investment and market expansion efforts [7] Overall Summary - Foster's 2024 annual report indicates significant pressure on the photovoltaic materials business, while the electronic materials segment has become a new growth point, and the functional film materials business is progressing steadily [7] - The company needs to focus on technological innovation, market expansion, and cost control to navigate the increasingly complex market environment [7]