Founder Securities: Focus on the core line of domestic substitution in semiconductors, breakthroughs in high-end chemical materials lead industrial transformation

According to the Zhitong Finance APP, Founder Securities released a research report stating that since the reform and opening up, China's chemical industry has gradually formed a relatively complete layout, with the world's largest production capacity for more than 20 products. However, China is heavily reliant on foreign countries for high-end chemical new materials, high-end chemical equipment, and cutting-edge technologies, making the domestic substitution of chemical new materials urgent. It is recommended to focus on four investment main lines.

Founder Securities' main viewpoints are as follows:

Main line of domestic substitution one: Resonance of domestic substitution and penetration rate increase of OLED materials

Benefiting from the leadership of Apple and Huawei, the use of stacked OLED technology, and the layout of 8.6-generation lines by panel manufacturers such as BOE, OLED is expected to enter a rapid development stage for medium and large sizes. The use of OLED stacking solutions is also expected to drive an increase in the amount of organic materials used. In addition, the global panel production capacity is shifting to domestic, promoting the establishment of a domestic supply system, coupled with self-control, the domestic substitution rate of OLED organic materials is expected to continue to increase. It is recommended to pay attention to leading OLED terminal material companies such as Shaanxi Lighte and Aolai De, as well as Wanrun Co., Ltd. and Ruile New Materials, which have layouts in OLED terminal materials, and Tongcheng New Materials, which is involved in OLED panel photoresists.

Main line of domestic substitution two: Domestic substitution of catalytic materials

1. The implementation of the National VI standard promotes the increase in the market size of honeycomb ceramics, with China's honeycomb ceramic carrier market expected to reach 12 billion in 2024. The global honeycomb ceramic carrier market has long been monopolized by Corning and NGK, but domestic company Guoci Materials has broken the overseas monopoly;

2. In the fine chemical field, domestic companies represented by KCNM and Shaanxi Ruike lead the domestic substitution of precious metal catalysts in fine chemicals;

3. Precious metal catalysts for basic chemicals represent a market with a stock of tens of thousands of tons, and currently, most segments of basic chemicals are occupied by foreign catalyst leaders. KCNM is actively laying out in this area. KCNM holds a leading position in the precious metal catalyst industry and has outstanding growth potential in fine chemicals and basic chemicals, strongly recommended.

Main line of domestic substitution three: Opportunities for domestic substitution of materials brought by self-controlled semiconductor manufacturing

1. High-end photoresists are still mainly monopolized by international giants, and self-control is imperative. It is recommended to focus on domestic photoresist leader Tongcheng New Materials, Yake Technology, which continues to increase its photoresist business, and Wanrun Co., Ltd., which is involved in photoresist monomers and resins;

2. The global high-frequency and high-speed resin market is expected to reach USD 6.256 billion by 2030. It is recommended to pay attention to Shengquan Group, which is involved in high-frequency and high-speed polyphenylene ether resins, and Dongcai Technology, which is involved in high-frequency and high-speed specialty epoxy and maleimide resins;

3. Global HBM revenue is expected to grow to USD 4.976 billion by 2025. Low-α spherical aluminum oxide is a key filler in HBM packaging materials. As the semiconductor industry shifts to China, the demand for Low-α spherical aluminum oxide in China is increasingly strong, benefiting domestic silicon micro powder leader Lianrui New Materials;

4. The global electronic-grade ultra-pure water market was nearly USD 4 billion in 2022, and the electronic-grade ultra-pure water resin market has long been occupied by American Dow, British Pall, and Japanese Mitsubishi. Blue Sky Technology has broken the foreign monopoly through independent research and development of jet method uniform particle technology, strongly recommended The Fourth Main Line of Domestic Substitution: Aligning with Industrial Strength, Domestic Substitution of Industrial Coatings is Timely

China's industrial coatings market exceeds 300 billion, and although foreign capital controls the overall market, domestic leaders such as Meijia Xincai and Songjing Co., Ltd. have emerged in competitive fields like containers, wind turbine blades, and 3C consumer electronics.

Risk Warning: Risks of macroeconomic fluctuations; risks of industrialization of new technologies and products; risks of intensified competition; risks of significant increases in raw material costs