Guangdong Skychem Technology (688603) Huaxin Securities·2024-10-18 03:30Investment Rating - The report maintains a "Buy" rating for the company [1]. Core Views - The company is expected to benefit from the steady progress of domestic substitution and the continuous improvement in the semiconductor sector. The revenue for the first three quarters of 2024 is projected to be between 272 to 274 million yuan, representing a year-on-year growth of approximately 10.08% to 10.88%. The net profit attributable to shareholders is expected to be between 56 to 58 million yuan, with a year-on-year increase of 34.45% to 39.26% [1][5]. Summary by Sections Performance Forecast - The company forecasts a net profit of 75 million yuan in 2024, 100 million yuan in 2025, and 131 million yuan in 2026, with corresponding EPS of 1.29, 1.71, and 2.25 yuan. The current stock price corresponds to PE ratios of 63, 47, and 36 times for the respective years [5][7]. Business Growth Drivers - The growth in performance is primarily attributed to the advantages of domestic substitution, actively expanding new customer bases, and the increasing sales proportion of high-margin electroplating specialty chemicals. Additionally, the increase in financial income and bank deposit interest has contributed to the growth [1][3]. Semiconductor Business Expansion - The company is expanding into the semiconductor field while consolidating its position in the PCB electronic chemical market. A new CTO with extensive experience has been appointed to lead a team focused on semiconductor product development. The company aims to cover all aspects of advanced packaging and process-related electroplating products, with a goal to become a major supplier to mainstream packaging and testing customers within two years [4][5]. Market Trends - The report highlights the urgent demand for domestic high-end PCB electronic chemicals due to the accelerated transfer of global integrated circuit capacity to China and increasing trade tensions. The domestic market for PCB specialty electronic chemicals is expected to grow at a rate of 5%-9% over the next three years, with a current domestic substitution rate of about 15%-20% [1][3]. Financial Metrics - The company’s revenue has grown from 168 million yuan in 2019 to 339 million yuan in 2023, with a CAGR of 19.22%. The net profit has increased from 22.985 million yuan to 58.572 million yuan during the same period, with a CAGR of 26.35% [1][5]. Market Position - The company has successfully replaced several production lines previously held by internationally renowned electronic chemical suppliers and is continuously advancing the domestic production rate of its products, particularly in high-end PCB electronic chemicals [3][4].