Guangdong Skychem Technology (SH:688603) Huaxin Securities·2024-09-04 05:30Investment Rating - The report gives a "Buy" rating for the company, marking the first coverage [1][4]. Core Views - The company, Tiancheng Technology (688603.SH), is a leader in electronic chemicals, showing steady growth in performance. In the first half of 2024, the company achieved revenue of 173 million yuan, a year-on-year increase of 7.94%, and a net profit attributable to shareholders of 36.65 million yuan, up 40.25% year-on-year [1][2]. - The company benefits significantly from the domestic substitution trend in high-end PCB electronic chemicals, with a focus on advancing its product lines and increasing market share [2][3]. Summary by Sections Financial Performance - In the first half of 2024, the company reported a revenue of 173 million yuan, a 7.94% increase year-on-year, and a net profit of 36.65 million yuan, which is a 40.25% increase year-on-year. The net profit after deducting non-recurring items was 30.68 million yuan, up 17.20% year-on-year [1][2]. - The second quarter of 2024 saw revenue of 92.69 million yuan, a year-on-year increase of 9.52% and a quarter-on-quarter increase of 15.73% [1][2]. - The company's gross profit margin improved to 38.51%, an increase of 3.16 percentage points year-on-year [1][2]. Market Position and Growth Potential - The company has established itself as a key player in the domestic market for electronic chemicals, particularly in the production of functional wet electronic chemicals for PCBs, packaging substrates, and other applications [2]. - The domestic market for PCB-specific electronic chemicals is projected to grow at a rate of 5%-9% over the next three years, with a current domestic substitution rate of approximately 15%-20% [2]. Strategic Initiatives - The company has implemented stock incentive plans to align the interests of its core team with the company's long-term development, which includes granting restricted stock to key employees [3]. - Management has shown confidence in the company's future by increasing their holdings and initiating stock buybacks, with a total buyback amounting to 37.77 million yuan at an average price of 49.80 yuan per share [3]. Profit Forecast - The report forecasts the company's net profit attributable to shareholders for 2024-2026 to be 75 million, 100 million, and 131 million yuan respectively, with corresponding EPS of 1.29, 1.71, and 2.25 yuan [4].