Net profit of +90%-120% reflects the high level of prosperity in the industry, and improving quality and efficiency is expected to exceed expectations throughout the year. The company issued a 21H1 performance forecast. During the reporting period, the company expects to achieve net profit of 69-80 million yuan to its mother, +90%-120% over the same period last year. We believe that the growth in the company's performance exceeded expectations is mainly due to two reasons: 1. Downstream demand for the main business (high-end equipment manufacturing, new chemical materials) continues to rise, the company's corresponding business has achieved rapid volume, and the high level of prosperity in the industry is prominent; 2. During the reporting period, the company continuously optimized internal management efficiency, achieved remarkable results in improving quality and efficiency, and the company's profits were further released.
The field of powder coating has been deeply involved in the field of powder coating. The two-wheel Qifei company, which manufactures new materials+high-end equipment, has formed a two-wheel drive business layout of “new chemical materials+high-end equipment manufacturing” with traditional business as the core. The company's traditional main business is R&D, production and sales of polyester resin series products and their raw materials for powder coatings. The high-end equipment manufacturing business mainly targets aviation, aerospace and rail transit. The products cover various categories such as composite materials, carbon fiber products, and metal parts.
The company's performance fluctuated somewhat in 2020 under the influence of the epidemic, and the company's performance quickly rebounded in 21Q1. According to the company announcement, in 2020, the company achieved revenue of 1,869 million yuan (down 10.07% from the previous year); it achieved net profit of 84 million yuan (down 33.12% from the previous year), mainly due to the impact of the epidemic on the delivery of the company's products. The company's performance rebounded rapidly in 21Q1, achieving operating income of 467 million yuan during the period (up 62.94% year on year) and achieving net profit of 28 million yuan (up 158.58% year on year).
The company has benefited from the boom cycle in the national defense and military industry. Composite materials have the property of “surging volume and price” according to the content of the 22nd Politburo meeting. According to the content of the 22nd Politburo meeting, China will enter the stage of “leapfrogging weapons and equipment development” + “strategic and disruptive technological breakthrough”. In summary, we believe that the end of the 13th Five+14th Five-Year Plan will be a period of accelerated breakthroughs in China's national defense equipment and cutting-edge technology. It is expected that leapfrog weapons and equipment represented by military aircraft and missiles will be scaled up when the economy enters a ten-year period of economic expansion.
Based on the lightness and excellent physico-chemical properties of carbon fiber, its composite materials are widely used in various fields such as aviation (F-35 wing, fuselage, etc.), missiles (carbon nose cones for intercontinental ballistic missiles), and ground armaments (structure/stealth armor). The company's existing composite business is already large-scale, and it is expected that the company's product lineage and industry scale will be greatly increased when the fund-raising project is completed. The application of the company's composite products has been expanded to a certain military equipment field, and the supply of cabins for key equipment is being mass-produced and delivered; at the same time, the fund-raising project of the company's composite parts production base is expected to achieve mass supply of components such as the Aerospace Science and Technology Group's vibration test bench and a composite housing. Based on the foregoing, we believe that the company will fully benefit from the “14th Five-Year Plan” leapfrog weapons and equipment mass production process, such as military aircraft and missiles, and that the composite material business is expected to be rapidly released.
Profit prediction and rating: In summary, we believe that in terms of high-end business, the company is expected to achieve rapid growth in the “14th Five-Year Plan” leapfrog weapons and equipment development, and the corresponding composite business is expected to achieve rapid growth; the civil rail transit and satellite internet composite business is expected to benefit from a high industrial boom cycle. Traditional business aspects benefit from environmental policies (“paint to powder”)
Trend) Promotion, the corresponding polyester resin business is expected to achieve an incremental layout. Under this assumption, the company is expected to achieve revenue of 21.10/23.72/2,667 billion yuan in 2021-23, corresponding to net profit of 1.58/205/259 million yuan, EPS is expected to be 0.19/0.25/0.31 yuan, P/E is 29.30/22.52/17.88x, maintaining the “buy” rating.
Risk warning: industry risk; macro liquidity risk; risk of raw material price fluctuations; forecast data is only preliminary accounting data, subject to the semi-annual report.
