Core ideas:
The company released its mid-2021 report and reported that Q2's revenue in a single quarter reached its highest level since its listing. The company's 21H1 realized revenue of 1.238 billion yuan, an increase of 36.72% over the same period last year, and a net profit of 157 million yuan, an increase of 52.25% over the same period last year. In a single quarter, the company's 21Q2 achieved revenue of 641 million yuan, an increase of 24.15% over the same period last year, and a net profit of 82 million yuan, an increase of 14.82% compared with the same period last year. Q2's single-quarter revenue reached the highest level since its listing. In terms of profitability, 21Q2's overall gross profit margin was 26.61%, down 1.22pct from the same period last year, and the overall net profit margin was 14.01%, down 1.62pct from the same period last year.
Q2 led the sales of products to achieve year-on-year growth, product prices did not change much compared with the same period last year. According to the announcement of the company's operating data, the revenue of 21Q2 Yongguhuang series, Lisol red series, permanent solid red series, Shidian red series and quinacridone series increased by 16.0%, 22.1%, 18.8%,-2.1% and 37.9%, respectively, and sales increased by 0.2%, 25.5%, 17.1%,-5.7% and 46.0% respectively compared with the same period last year. The year-on-year changes in sales prices were 15.8%,-2.7%, 1.5%, 3.9% and-5.6%, respectively.
The 3000-ton high-performance organic pigment project began to contribute to the performance, and the metal sodium project progressed steadily. According to the China News, the company's 3000-ton high-performance organic pigment project carried out trial production at the end of 2020, and the yield increased to 50% at the beginning of April and was close to full production by the end of the first half of the year. The Yuansheng sodium production project in Inner Mongolia is progressing smoothly, and the installation of the main equipment in the production area has been basically completed.
Profit forecast and investment advice. We expect the company's earnings per share in 21-23 years to be 1.11 yuan, 1.38 yuan and 1.51 yuan respectively, and the current share price corresponds to 15 times, 12 times and 11 times earnings. According to our forecast, the annual compound growth rate of the company's earnings per share in 21-23 is expected to be 22%, maintaining the company's fair value of 24.52 yuan per share unchanged, corresponding to the company's 2021 PE valuation of 22 times per share, maintaining the "overweight" rating.
Risk tips. The price of organic pigment products fell, the price of raw materials fluctuated sharply; downstream demand remained depressed; the progress of projects under construction was lower than expected; major safety and environmental accidents.