Event Overview
Cofco Packaging released the 2021 mid-term report, 2021H1 achieved revenue of 4.678 billion yuan, + 38.5% year-on-year; net profit of 258 million yuan, + 40.8% year-on-year, performance continued to exceed expectations, and revenue and profits reached record highs. In addition, the company intends to pay an interim dividend of 0.112 yuan per share (equivalent to HKD 13.5 cents), with an interim dividend yield of 3.05%.
Analysis and judgment:
Revenue side: the three major businesses are neck and neck with higher-than-expected revenue growth.
According to the category, the income of 2021H1's aluminum / tinplate / plastic packaging business reached RMB 2.41 million respectively, with a year-on-year growth rate of + 44.8%, 35.4% and 21.8% respectively. Among them, 1) aluminum packaging: from a breakdown point of view, the income of 2021H1's two-piece cans / single-chip cans is 20.51 / 90 million yuan respectively, which is 26.8% higher than that of the same period last year. After the normalization of the epidemic, the canning rate increased steadily, the downstream beer industry promoted high-end upgrading, and the supply and demand pattern of the industry continued to improve. 2) tinplate packaging: 2021H1 subdivided products showed varying degrees of rise, in which the performance of steel buckets was eye-catching, mainly due to strong downstream demand and the rapid release of new production capacity of steel buckets in the first half of 2021. According to the category, the income of steel drums / milk powder cans / aerosol cans / metal covers / three-piece cans / square cans / printing and coated iron is 6.69% 3.56 cans / square cans / printing and coated iron respectively. The income is RMB 1.990 million RMB per cent, with a year-on-year growth rate of + 67.3%, 6.9%, 51.3%, 11.9%, 60.7%, 55.0%, 20.9% respectively. 3) plastic packaging: the company actively promotes strategic cooperation with Blue Moon and promotes the development of new products and new customers. 2021H1 plastic packaging revenue is + 21.8% compared with the same period last year.
Profit side: product price increase & cost control, net interest rate slightly higher than the same period last year.
2021H1's gross profit margin and net profit margin were 14.14% and 5.49% respectively, compared with the same period last year-2.17pct and + 0.08pct, respectively. Gross profit margin declined, mainly affected by the rise in raw material prices, but the net profit margin increased slightly compared with the same period last year, mainly due to the company's good cost control. From a business point of view, the gross profit margin of 2021H1's aluminum / tinplate / plastic packaging business is 15.6% 12.4% 16.7% respectively, compared with the same period last year, respectively-1.2pct/-3.8pct/+2.9pct. Affected by the rising prices of aluminum, tinplate and other raw materials, the gross profit margin of the company's aluminum and tinplate packaging business has declined to varying degrees compared with the same period last year. The company adjusts the product structure and steadily promotes price increases and other measures. Relieve the pressure on the cost side to some extent. In terms of period expenses, the period expense rate of 2021H1 is 8.92%, year-on-year-1.34pct, and the cost control is good, of which the sales expense rate, management expense rate and financial expense rate are 4.19%, 4.09%, 0.64% and-0.01pct/-0.49pct/-0.84pct respectively, respectively. The decrease in financial expense rate is mainly due to the decrease in the leverage ratio of the company.
We will increase the distribution of production capacity in key categories, and our leading edge will be gradually expanded.
In the first half of the year, the industry is affected by the sharp rise in raw material prices, and the cost side is under pressure, while the company, as the leader of metal packaging, has advantages such as production capacity, customers and supply chain, as well as internal cost control to effectively digest the cost pressure to achieve steady growth. the industry share is accelerated and concentrated to the leading enterprises, the competition pattern will continue to improve, and the company will increase the capacity layout of key categories, and the leading edge of production capacity will be gradually expanded. By the end of June 2021, the company's capital expenditure was about 366 million yuan. Among them, Belgium project, two-piece can project, tinplate project, plastic project and steel bucket project accounted for 21.1%, 48.9%, 14.2%, 8.7% and 3.0% respectively. The second line of the company's two cans in Tianjin and Wuhan have been trial-produced in the first half of the year, and the third line in Chengdu will be launched in the second half of the year, and will continue to promote the landing of the new factory in Kunming and further expand the southwest market. The production and operation of the Belgian project improved in the first half of the year, effectively meeting the needs of overseas customers, including Coca-Cola Company.
Investment suggestion
The company is the leader of metal packaging, over the past 20 years, the company's revenue and profits continue to hit a record high, performance continues to exceed expectations. By raising the previous profit forecast, the company's income in 2021-2023 will be adjusted from 83.61,93.63 and 10.327 billion yuan to 96.79,115.72 and 13.395 billion yuan respectively, and the return net profit will be raised from 4.32,4.99 and 563 million yuan to 4.94,6.03 and 719 million yuan respectively, calculated according to the midpoint between the Hong Kong dollar and RMB on August 19. The corresponding PE is 8 times, 7 times and 6 times respectively, maintaining the "buy" rating.
Risk hint
The risk of a sharp rise in the price of raw materials; the improvement of beer canning rate is not as expected; customer expansion is not as expected.