The company announced its mid-2021 report that its growth performance exceeded expectations. 2021H1 achieved an income of 4.678 billion yuan, + 38.5% year-on-year, 27.1% higher than 2019H1N1, and realized a net profit of 249 million yuan, + 36.1%, and 46.5% compared with 2019H1N1. 2021H1 received 50 million yuan in dividends from Jiadoubao. Excluding the impact, the return profit was + 8.7% year-on-year, 17.1% higher than that of 2019H1N1.

The demand for cans at home and abroad is improving, and the business of each plate of the company has increased rapidly. The income of tinplate / aluminum / plastic packaging of 2021H1 company is 2.251 million yuan, 24.1 million yuan, 21.7% compared with the same period of last year, which is 21.7% compared with the same period of last year. Compared with 2019H1, the revenue of tinplate / aluminum / plastic packaging is + 33.0%, 24.3% and 7.1%, respectively, compared with the same period of the same period of last year. The company's income at home and abroad was 42.99 million yuan and 30.9% respectively compared with the same period last year, which was 303.2% and 282.8% higher than that of 2019H1, 20.0% and 20.0% respectively. Affected by the epidemic overseas, the supply of tanks is tight, the operation of the overlay company's Belgian factory is gradually normal, and the income contributed by overseas business has increased significantly. Promoted by domestic plastic restrictions, the demand for superimposed household consumption has increased, the canning rate such as beer has continued to rise, the new production capacity in the industry has been limited, the relationship between supply and demand in the industry has continued to improve, the utilization rate of production capacity in the domestic industry has been 80%, 85%, and the operating rate of the company has exceeded 90%. Achieve steady growth in sales.

The price of raw materials rose in the first half of the year, and the gross profit margin was slightly under pressure; the mid-year price increase landed, reflecting an improvement in the pattern. The gross profit margin of 2021H1 tinplate / aluminum / plastic packaging is 12.4%, 15.6% and 16.7%, respectively, compared with the same period last year-3.8/-1.2/+2.9pct. Tinplate and aluminum prices have continued to rise since 2021, and 2021H1 tinplate / aluminum prices are 32% higher than the same period last year. As the company is 60-70% foreign-funded customers, the pricing mechanism adjusts prices according to raw material price fluctuations. Due to the lag of price adjustment, the company's gross profit margin in the first half of the year is still under pressure, but the decline is limited. In 2021, two cans successfully raised prices by 4-5 cents per can, hedging the pressure of rising prices of raw materials, the bargaining power of the industrial chain has been greatly enhanced, and profits are expected to improve in the second half of the year.

Reduce fees and increase efficiency, maintain high profitability, and continue high dividends. 2021H1's gross profit margin / net profit margin is 14.1% / 5.5%, respectively, compared with the same period last year-2.2/+0.1pct. The company actively promotes the improvement of internal manpower management efficiency, 2021H1 staff reduction of 187people, through equipment automation and intelligent upgrading to improve production efficiency and achieve internal cost reduction and efficiency. At the same time, the company's financing costs have decreased, resulting in savings in financial expenses. The sales / management / financial expense rates of 2021H1 are 4.2%, 4.1% and 0.6%, respectively, compared with the same period of last year + 0/-0.5/-0.9pct. The company continues to attach importance to shareholder returns, continuing the 50% dividend ratio and paying an interim dividend of 0.112 yuan (HKD 13.5 cents) in 2021.

Raw material prices tend to stabilize, profits in the second half of the year are expected to be further repaired, medium-and long-term profit margins continue to rise. The company has excellent customer structure and flexible price adjustment mechanism. In view of the substantial increase in the price of raw materials in the first half of the year, the price increase will be fully implemented in the second half of At the same time, raw material prices tend to be stable in the second half of the year, considering the company's price increases to customers, profitability in the second half of the year is expected to In the medium and long term, 1) after a five-year integration period, the CR4 of the two-piece can industry has been raised to 70% wi 75%, the capacity supply in the industry has been expanded in an orderly manner, the relationship between supply and demand has gradually improved, and the overall profit level has been repaired upward. 2) with the commissioning of 2021H1 in Tianjin and Wuhan, the efficiency of 2021H2 will be further improved during the climbing period, while the Belgian plant will gradually get rid of the influence of the epidemic and its profitability will be repaired. 3) the company's two-piece cans account for a high proportion of high-quality customers, and the "single factory and two-line" layout and production automation transformation further improve production efficiency and form an effective support for the company's two-piece can profit margin.

The pattern of the two-piece can industry is optimized, the CR4 is over 70%, the profit demand of the head enterprise is the same, and the price of the two-piece can continues to rise. The company's two-piece can business customer structure is good, through the "single factory two-line" layout to achieve efficient multi-can production; Belgium factory put into operation, sufficient orders, serving the European market with higher gross profit margin, profitability and stability are better than their peers. Three-piece can business to promote the layout of the factory, deep binding downstream core customers Feihe, Yili, Wanhua Chemical, volume growth. The current PB of Cofco Packaging / Oruijin / Shengxing PE in 2021 is 9X/15X/27X (Oruijin and Shengxing use Wind consistent forecast), the horizontal comparison valuation is the lowest and the safety margin is sufficient. The profit elasticity of two-piece cans is released, the new products of three-piece cans business is growing rapidly, and the consumption attribute of the company is outstanding, which is expected to maintain steady growth. We look forward to returning to Hong Kong Stock Exchange in the future, and there is more room for further upward repair. The company still has a dividend of 138 million yuan to be recovered. Our profit forecast does not take into account the dividend income for the time being. We maintain the profit forecast for 2021-2023 to 4.4,5.1 and 580 million yuan, which is + 12.9%, 17.0% and 12.7%, respectively, compared with the same period last year. The corresponding PE is 9X/8X/7X, and the "Buy" rating is maintained.