Tstc(600552) 民生证券·2024-05-17 08:30Investment Rating - The report gives a "Buy" rating for the company, indicating a positive outlook on its future performance [32]. Core Views - The company is positioned as a leading player in the domestic UTG (Ultra-Thin Glass) market, with significant capacity expansion to meet the growing demand for foldable screens [32]. - The application materials segment is expected to see substantial growth, particularly in high-value zirconium-based products [32]. - The company has a strong incentive structure in place, with stock options linked to performance targets, which is expected to drive profitability [32]. Summary by Sections Company Overview - The company, established in 2000 and listed in 2002, focuses on display materials and application materials, both of which are key emerging industries in China [71]. - The company operates under the "3+1" strategy, which includes three main business segments and one R&D platform [71]. Display Materials - The company is a leader in the UTG market, with a significant increase in the adoption of UTG in foldable smartphones, rising from 13% in 2020 to nearly 70% in 2023 [82]. - The second phase of UTG production capacity is being gradually released, with a target of 15 million pieces per year [82]. Application Materials - The application materials segment has seen a CAGR of 15% from 2014 to 2023, focusing on zirconium, silicon, and titanium products [83]. - The zirconium series is expected to generate significant revenue, particularly from high-value nano-composite zirconia [83]. - The company is also expanding its product range to include high-purity silicon and nano-titanium barium, which are critical for various high-tech applications [83]. Financial Forecast and Investment Recommendations - The company is projected to achieve net profits of 226 million, 308 million, and 396 million yuan for the years 2024, 2025, and 2026, respectively [32]. - The current price corresponds to dynamic P/E ratios of 43x, 32x, and 24x for the same years, indicating a favorable valuation [32].