Qicheng Co., Ltd.: Ukuhola Imakethe Ye-Precipitated Silica Emhlabeni Ngemixazululo Ehlakaniphile Yokuguqulwa Okuphezulu Nokukhula

领先的沉淀硅石企业：启程有限公司顺应高端转型与增长的趋势

As a leader in China’s precipitated silica industry, Qicheng Co., Ltd. is well-positioned for high-end transformation and growth. The company is a leading enterprise in China’s precipitated silica sector, with a complete industrial chain from raw materials (sulfuric acid, sodium silicate) to the final product (precipitated silica). It is also one of the world’s largest producers of high-dispersion silica for green tires and silica for animal nutrition carriers. In the first three quarters of 2024, the company achieved a net profit attributable to shareholders of approximately RMB 379 million, a year-on-year increase of about 24.34%. With the accelerated commissioning of new production capacity and high-value-added products, there is significant room for future performance growth.

Green tires are gaining momentum, and the precipitated silica industry maintains a positive outlook. As a dedicated material for green tires, high-dispersion silica reduces rolling resistance by approximately 30% compared to carbon black and can replace carbon black to a greater extent. Benefiting from the rapid development of the automotive industry and the greening trend in tire production, demand for silica for tires is expected to continue rising. Beyond tire applications, demand in other fields such as silicone rubber and toothpaste is also on the upswing. Globally, high-end application areas of precipitated silica are mainly dominated by large multinational chemical enterprises, creating room for domestic substitution.

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We believe Qicheng, as one of the global leaders in precipitated silica, continues to advance domestic and overseas production capacity layout, expanding its scale advantages. Simultaneously, the company has built a technology platform for silica products and accelerated the implementation of high-end projects such as silica microspheres, promising strong future growth. We predict the company’s net profit attributable to shareholders will reach RMB 503 million, RMB 613 million, and RMB 711 million in 2024, 2025, and 2026 respectively, corresponding to PE ratios of 15x, 12x, and 10x (based on the closing price on December 16). We initiate coverage with a "Buy" rating.

*Source: Wind, Yongxing Securities Research Institute (December 16, 2024 closing price) *

*Source: Wind, Yongxing Securities Research Institute *

The analyst(s) signing this report hold the qualification for securities investment consulting granted by the Securities Association of China and are registered as securities analysts. They have issued this report independently and objectively with a diligent and responsible professional attitude and a professional and prudent research method. The information used in this report is obtained from compliant channels, and the analysts bear responsibility for the content and views of this report. All researchers responsible for preparing and writing this report hereby confirm that any views expressed in this report clearly, accurately, and truthfully reflect their views and conclusions and are not influenced or instructed by any third party. In addition, no part of the researchers’ compensation has been, is, or will be directly or indirectly related to any specific recommendation or view in this report .

Ngaphakathi kwemingcele evunyelwe umthetho, i-Yongxing Securities Co., Ltd. (lapha ibizwa ngokuthi "iNkampani") noma izikhungo zayo ezihlobene zing holding izinsiza noma ama-options enkampani okukhulunywa ngayo embikweni futhi zenze ukuhweba, futhi zingase futhi zinikeze noma zifune ukuhlinzeka ngezinsizakalo zokutshalwa kwezimali, izeluleko zezezimali, nezinsizakalo zemikhiqizo yezezimali kulezi zinkampani. Ngakho-ke, abatshalizimali kufanele bacabangele izinkinga ezingase zibe khona zokuphikisana kwezithakazelo ezingase zithinte ubungcweti bezimvo kulo mbiko futhi akufanele bakubheke lokhu kubika njengokubhekisela okukodwa kuphela kokutshalwa kwezimali noma ezinye izinqumo. Abatshalizimali kufanele futhi bangashintshi ukuhlaziywa kwabo nokwahlulela kwabo ngezikhalazo zokutshalwa kwezimali zomhlaziyi.

Lo mbiko leli linamalungelo obunikazi abukhona kwenkampani futhi liyi-mininingwane engatholakali emphakathini. Inkampani igcina wonke amalungelo kulombiko. Ngaphandle kwemvume ebhaliwe yangaphambi kokuthi inkampani, akukho msebenzi noma umuntu ongakopisha, ukukopisha, ukuprinta, ukukhipha, noma ukuhlinzeka nganoma yisiphi isiqephu salombiko nganoma iyiphi indlela. Ngaphandle kwalokho, umonakalo uzothwala zonke izinzuzo ezimbi kanye nezibopho zomthetho ezivela kulokho.

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