ICA-DZT Research is excited to initiate coverage on Global New Materials International (GNMI), a company positioned to capture significant market share in the pearlescent pigment industry. Here are six essential insights for investors:
Market Leadership:
GNMI is the largest producer of pearlescent pigments in China and ranks third globally. This strong market presence and competitive edge demonstrate the company’s leadership in the industry.
Innovative Products:
GNMI is at the forefront of the transition from natural to synthetic mica-based pearlescent pigments. This shift is driven by the depletion of natural mica resources and the growing demand for high-quality, environmentally friendly products.
High-End Demand:
The company targets high-end markets such as automotive and cosmetics, where its products command premium prices. These segments are projected to grow at CAGR of 25.9% and 16.7%, respectively.
Capacity Expansion:
Operating at full capacity, GNMI is significantly expanding its production capabilities to meet the increasing global demand for pearlescent pigments.
Strategic Acquisitions:
The acquisition of CQV enhances GNMI’s product portfolio and strengthens its market position in high-end pearlescent pigments, reinforcing the company’s leadership.
Valuation and Target Price:
Our DCF model values GNMI at RMB 6.8 billion (or USD 945 million), equivalent to 2025E PER and EV/EBITDA of 18.7x and 11.4x, respectively. We set a target price of HKD 6.00 and a BUY rating for the company.
