21H1 homed net profit increased by 97.5% compared with the same period last year, maintaining the "overweight" rating. On August 15, the company released a semi-annual report with 21H1 revenue of 3.097 billion yuan (yoy+100.5%) and home net profit of 60 million yuan (yoy+97.5%). In view of the fact that the company's copper foil construction progress is not as expected, we slightly downgrade the copper foil production and marketing hypothesis for 21 years, but the copper price has been strong in the past 21 years, and there is still support for medium-and long-term copper supply and demand, so we raise the copper price hypothesis for 21-23 years; it is estimated that the EPS for 21-23 years is 0.48 pound 0.51 pound 0.60 yuan (the previous value is 0.44 pound 0.49 pound 0.59 yuan). Comparable company PE (22e) average 25.5 times, considering the uncertainty of the ultra-thin copper foil project production, give a certain valuation discount, give the company 19 times PE (22e), EPS (22e) is 0.51 yuan, the target price is 9.69 yuan (the previous value 9.35 yuan), maintain the holding rating.
The volume and price of plate and strip business has risen, and the project of raising investment in copper foil has slowed down.
During the reporting period, the company's operating performance improved steadily, mainly due to the increase in production and sales in the current period and the rise in copper prices. According to the announcement of the company's 21H1 main operating data, 21H1 achieved copper plate and strip production and sales of 5.16 / 51800 tons, an increase of 40.9% and 45.5% over the same period last year, of which 21Q2 production and sales of 28,000 tons (qoq+18.6%/+20.5%), the company's new production capacity is gradually released. However, due to the increasingly fierce market competition, the subsidiary Zhongyuan science and technology soaking plate project has not been promoted for the time being; and the installation of ultra-thin copper foil equipment in the fund-raising project has not been completed, and the construction progress of the project is not as expected. In the second half of the year, the company will continue to actively follow up the progress of equipment parts import, installation and commissioning, and realize the full production and capacity release of the fund-raising project as soon as possible.
R & D expenses increased significantly, and the cash flow of fund-raising activities was year-on-year during the reporting period, and the rates of sales, management, R & D and financial expenses changed year-on-year-0.09pct,-0.17pct, 0.15pct and 0.05pct. Among them, sales expenses and management expenses increased by 41.4% and 40% respectively compared with the same period last year, mainly due to the increase in production and sales in the current period, the increase in staff salaries and other expenses compared with the previous period, and the social security expenses borne by the company in the same period last year. Financial expenses increased by 297% compared with the same period last year, mainly due to the increase in loans needed for production and operation and the increase in exchange rate losses, coupled with the decrease in interest income from the gradual use of funds from the fund-raising account; the company's investment in research and development increased significantly, an increase of 111.6% year-on-year. In the same period, the net cash flow generated by fund-raising activities increased by 293% compared with the same period last year, mainly due to the increase in short-term borrowing in the current period due to the needs of production and operation.
The project of raising investment in copper foil still needs to be promoted to maintain the "overweight" rating.
In view of the fact that the company's copper foil construction progress is not as expected, we slightly reduce the copper foil production and marketing assumption for 21 years, but the copper price has been strong in the past 21 years, and there is still support for medium-and long-term copper supply and demand, so we raise the copper price hypothesis for 21-23 years; the company's net profit for 21-23 years is expected to be 1.16 pm 1.47 million yuan (the previous value is 107pm 1.19 / 143 million yuan). Comparable company Wind unanimously expected PE (22e) mean 25.5X, considering the uncertainty of ultra-thin copper foil project production, given a certain valuation discount, given 22-year 19XPE, corresponding to EPS of 0.51 yuan, corresponding to the target price of 9.69 yuan (the previous value of 9.35 yuan), maintaining the "overweight" rating.
Risk tips: copper strip and foil demand and product yield are not as expected; the construction of new materials is not as expected.
