Red Avenue New Materials(603650) 兴业证券·2024-08-27 10:13Investment Rating - The report maintains a "Buy" rating for the company, with a target price of 26.37 yuan as of the market data date of 2024-08-23 [1][3] Core Views - The company's traditional rubber additive business benefits from the high prosperity of the tire industry, while its electronic materials business is developing rapidly [3] - In H1 2024, the company achieved revenue of 1.576 billion yuan (yoy +15.11%) and net profit attributable to the parent company of 313 million yuan (yoy +40.35%) [3] - The company's semiconductor photoresist business grew rapidly, with revenue of 128 million yuan (yoy +54.43%) in H1 2024 [4] - The company's display panel photoresist revenue reached 159 million yuan (yoy +27.8%) in H1 2024 [4] Financial Performance - The company's revenue is expected to grow from 2.944 billion yuan in 2023 to 5.066 billion yuan in 2026E, with a CAGR of 19.8% [2] - Net profit attributable to the parent company is forecasted to increase from 407 million yuan in 2023 to 699 million yuan in 2026E, with a CAGR of 19.7% [2] - The company's ROE is projected to improve from 11.9% in 2023 to 17.6% in 2026E [2] - EPS is expected to grow from 0.68 yuan in 2023 to 1.17 yuan in 2026E [2] Business Segments - The company's tire resin sales volume increased by over 9,000 tons (yoy +14.7%) in H1 2024, with sales revenue up by 130 million yuan (yoy +12.7%) [3] - Investment income from affiliated enterprises reached 209 million yuan in H1 2024 (yoy +51.98%) [3] - The company's fully biodegradable material revenue was 30 million yuan in H1 2024 (yoy -31.85%), with PBAT production facilities temporarily shut down [3] Industry Outlook - The company is a global leader in phenolic resin rubber additives for tires [4] - Through acquisitions of leading photoresist manufacturers, the company has become a domestic leader in the photoresist production field [4] - The company signed a cooperation agreement for the "Semiconductor Chip Advanced Polishing Pad Project" on May 27, 2024, with an expected annual capacity of 250,000 pieces [4]