Event:

On April 15, the company released the 2024 annual report and the first quarter report of 2025, in 2024, the company achieved operating income of 533 million yuan, a year-on-year increase of 3%, and net profit attributable to the parent company of 90 million yuan, a year-on-year increase of -26.04%; In the first quarter of 2025, the operating income was 153 million yuan, a year-on-year increase of -40.71%, and the net profit attributable to the parent company was 25 million yuan, a year-on-year increase of -73.23%.

The operating rate of the OLED industry has increased steadily, and the 8.6 generation line upgrade is imminent: The

annual report discloses that the operating rate of the OLED industry will increase steadily in 2024, with global shipments of OLED panels for smartphones reaching 834 million pieces, and OLED panel shipments for foldable mobile phones reaching 24 million pieces, with a total shipment of 858 million pieces, achieving a year-on-year increase of 27% compared with the previous year, and the downstream demand has effectively driven the market demand for OLED materials. At the same time, OLED is gradually penetrating into the medium-sized field, and the industry's 8.6 generation line is about to be upgraded. As a two-wheel drive company for equipment and materials in the OLED industry, the company will achieve operating income of 533 million yuan in 2024, of which organic light-emitting materials will achieve operating income of 340 million yuan, a year-on-year increase of 7.05%, and other functional materials will achieve operating income of 23 million yuan. Affected by the fact that the OLED industry is in the transition period from the 6th generation line to the 8.6th generation line, the company's evaporation source equipment achieved an operating income of 169 million yuan, a year-on-year decrease of 15%, but the company successfully won the bid for the BOE 8.6 generation AMOLED production line project in February 2025, with a winning bid amount of 6-750 million yuan (the specific amount needs to be finalized according to the signed contract, and there is still uncertainty).

Increase R&D and innovation, and continue to launch new products:

The annual report discloses that during the reporting period, the company's R&D investment amounted to 150 million yuan, and in terms of material R&D, the company promoted the upgrading and iteration of GP, RP, BP, and accelerated the application of RD and RH production lines, and achieved phased results, and applied for 111 new invention patents during the reporting period, and added 67 invention patents. In terms of equipment, the company has successfully developed the 8.6 generation evaporation source equipment, successfully launched the MicroOLED evaporation machine tailored for MicroOLEDs, and made breakthroughs in the key technology of large-area uniform film formation in the field of perovskite cells, and effectively developed perovskite evaporation machine equipment.

Investment suggestions:

We expect the company's revenue in 2025~2027 to be 757 million yuan, 1.195 billion yuan, and 1.733 billion yuan respectively, and the net profit attributable to the parent company to be 164 million yuan, 292 million yuan, and 386 million yuan respectively, giving 30 times PE in 25 years, corresponding to a six-month target price of 23.65 yuan, and maintaining a "buy-A" investment rating.

Risk warning: industry demand is less than expected; The introduction of new product development is less than expected; intensified competition in the market; Geopolitical risks.