The readings of this report are as follows:
2021H1 achieved a net profit of 60 million, an increase of 115% over the same period last year, and sales of major membrane products increased steadily.
Main points of investment:
Upgrade to "overweight" rating: considering that as the industry leader, the company will benefit from the rapid development of the industry trend of domestic substitution of high-end film, according to the financial report data, we raised the company's forecast net profit for 2021-2022 to 1.30 (+ 18%) and 150 (+ 26%) billion yuan, increasing the forecast company's 2023 net profit by 175 million yuan, corresponding to EPS of 0.31,0.36,0.42 yuan respectively. Give the company 35 times PE in 2022, raise the target price to 12.60 yuan, 25% upward space, to "increase holdings".
The membrane business is developing rapidly. 1) 2021H1 achieved revenue of 685 million, an increase of 51% over the same period last year, and a net profit of 60 million, an increase of 115% over the same period last year, and the performance was in line with expectations. 2) the rapid growth of the company's performance is mainly due to the strong control of the domestic epidemic situation and the gradual release of the market demand for industrial membrane, the company speeds up the layout of market channels, enriches product types, optimizes product structure, and strengthens the promotion of high-throughput household membranes and other products. 2021H1 achieved steady growth in sales of major membrane products; 2021H1 achieved a revenue of 369 million yuan, an increase of 38% over the same period last year; and a net profit of 74 million yuan, an increase of 64% over the same period last year.
The operation of brown fiber business has improved. In the case of high raw material prices, the company does a good job of cost control, process transformation and product upgrading to improve product quality and production efficiency. The revenue of 2021H1 brown fiber business was 222 million yuan, up 64% from the same period last year, and the net profit was 9.78 million yuan, up 76% from the same period last year.
In terms of membrane separation business, the rapid development of lithium extraction from salt lake in China, the import substitution trend of membrane materials will promote the application of membrane salt lake lithium extraction technology, and the leading companies with the core technology of membrane separation will usher in new opportunities. The main results are as follows: 1) membrane separation is expected to become one of the important technical routes for extracting lithium from salt lakes in China. 2) at present, the production technology of nanofiltration and reverse osmosis membrane in China is more mature, the local leading companies have outstanding cost-effective products, and the market share is expected to be further improved. 3) pay attention to the application progress of the company's products in the field of extracting lithium from membrane salt lake.
Risk tips: overseas business expansion is lower than expected; sewage recycling policy is lower than expected and so on.
