Huitian new material adhesive institute independent innovation to achieve domestic replacement

- Nov 22, 2019-

Domestic replacement and independent innovation is the hottest market this year. The semiconductor and 5G upstream industries are in the lead, and the related new chemical materials industry will also benefit fully from 5G.On November 19, huiten xincai (300041), huawei's supplier of adhesives for mobile phones, announced the establishment of huiten communications electronic materials technology research institute.The company aims to enhance its strategic layout of new materials such as 5G and adhesives for communication and electronics, and seize opportunities for cooperation and development provided by huawei and other customers.Many brokers believe that huitain new material will fully benefit from the growth of the industry and concentration of the promotion.In the face of domestic substitution, many companies have doubled their growth rate in the communication and electronics industry this year, such as shengban (300661) in the semiconductor industry. Under the background of the general trend of benefiting from the domestic substitution trend significantly and the domestic industrial chain being independent and controllable, the growth rate of this year has reached 140%.Its high barriers, high margin advantage so that many institutions are very optimistic.Guosen securities believes that, with the increase of the willingness of downstream customers to make domestic substitutes, analog IC products, as one of the core components, will embrace the rapid growth opportunity of making domestic substitutes.In 2018, shengbang launched more than 200 new products with completely independent property rights, including many new products of signal link and power management, which have reached the international leading level. The volume of downstream applications and new products increased both the revenue and gross profit rate.Under the general trend of domestic substitution, shengbang, as the leader of domestic scarce analog chip, will usher in a period of rapid growth.As an indispensable supporting product of communication electronic products, new chemical materials will also benefit from domestic substitution and independent innovation.Huitian new material co., LTD. (hereinafter referred to as "guangzhou huitian"), a wholly owned subsidiary of the company, is planning to increase capital of 90 million yuan and set up a research institute of huitian communication electronic materials technology.Guangzhou huitian as one of the company's main subsidiaries, is the company's electronics, LED adhesive products, the main production, sales, radiation pearl river delta region downstream industry market.This capital increase and establishment of the research institute, the main research direction is around 5G and application field functional silicone, epoxy, acrylate and other products, engaged in bonding, sealing, high heat conduction research, application and provide solutions.In recent three years, huitanxincai's average r&d expenditure accounted for 4.45% of its operating income, and its r&d expenditure was also ahead of its peers.Southwest securities said that the company is China's largest listed adhesives industry, scientific research results into industrial production capacity is strong, is the domestic engineering adhesives industry research and development of the most abundant variety of enterprises.At the same time, the company's sales network coverage, while strategic focus on quality customers and the main peak market, marketing capabilities.In the mid-year report of 2019, huitanxincai said that as the price of upstream raw materials fell, the company tapped potential to reduce consumption and made new breakthroughs in the research and development of new products, the company's product quality and gross profit rate improved significantly.The company's products in the adhesive high-end application field further break down the technical barriers of foreign enterprises, expand the share of import substitution.In adhesives industry, because of the low threshold of the emergence of a large number of domestic small and medium-sized enterprises, resulting in low industry concentration.Guojin securities believes that, from the perspective of the development history of the world adhesive industry, China's adhesive industry will transition to maturity in the next few years, and the industry concentration will continue to improve.In addition, with the global economic slowdown and the rise of trade friction, China's adhesive industry ushered in an excellent opportunity for development;The support of the country in the emerging industry continues to increase for the material innovation provides a good soil, leading adhesive enterprises will usher in the opportunity to enter the high-end field, adjust the product structure, improve profitability will be the only way leading enterprises to become bigger and stronger, it is recommended to focus on the domestic adhesive leading enterprises huitian new material.