Events:
On August 28, 2021, the company released its semi-annual report for 2021. In the first half of the year, the company achieved operating income of 922 million yuan, + 76.13% compared with the same period last year, and net profit of 73.32 million yuan, + 134.52% compared with the same period last year. In terms of individual quarters, the company achieved operating income of 524 million yuan in the second quarter, + 31.66% from the previous quarter, + 64.26% from the same period last year, and net profit from the home of 42.07 million yuan, + 34.62% from the previous quarter, and + 108.68% from the same period last year.
Comments:
The increase in cost is greater than the increase in revenue, and the company's gross profit margin decreases. In the first half of the year, the company achieved operating income of 922 million yuan (YoY + 76.13%), mainly due to increased production capacity, increased sales volume and rising product sales prices. In the first half of last year, as the first phase of the company's annual output of 40,000 tons of MBS impact modifier project (20,000 tons / year) was put into production in the middle of last year, and the first phase of Linyi Ruifeng annual production of 40,000 tons of MC impact modifier project (20,000 tons / year MC) reached production and efficiency in the middle of last year, the company's sales volume of various products reached 69400 tons, an increase of 56.41 percent over the same period last year. In terms of cost, the company's operating cost in the first half of the year was 741 million yuan (YoY + 91.84%), mainly due to a large increase in the price of raw materials such as methyl methacrylate, styrene, butadiene and butyl acrylate, and the corresponding increase in carry-over sales cost with the increase of sales volume. In terms of gross margin, operating costs increased more than operating income, resulting in a decline in the company's gross margin-6.59pct to 19.64%. From a business point of view, the company's ACR processing aids and impact modifiers realized operating income of 448 million yuan (YoY+36.45%), operating cost of 364 million yuan (YoY+48.78%) and gross profit margin of 18.71% (YoY-6.74pct); MBS impact modifier realized operating income of 353 million yuan (YoY+96.91%), operating cost of 278 million yuan (YoY+115.89%) and gross profit margin of 21.24% (YoY-6.93pct). The MC impact modifier realized an operating income of 110 million yuan (YoY+883.19%), an operating cost of 90 million yuan (YoY+881.56%) and a gross profit margin of 17.5% (YoY+0.14pct).
The comprehensive production capacity of PVC auxiliaries is in the forefront steadily, and the leading position of the industry is expected to be further improved. As one of the leading enterprises in the PVC auxiliaries industry, the company's comprehensive production capacity has reached 160000 tons, including 70, 000 tons of ACR products, 50, 000 tons of MBS products and 40, 000 tons of MC products, ranking in the forefront of the industry. In terms of construction, in June 2021, the second phase of the MC impact modifier project with an annual output of 40,000 tons (20,000 tons / year) reached the state of use and is expected to be completed in the fourth quarter of 2021, when the company's comprehensive production capacity of PVC auxiliaries will reach 180000 tons, further strengthening its leading position in the industry.
PBAT is about to be put into production, PLA one-step pilot test is successful, and the company's biodegradable plastics business is promoted in an orderly manner. PBAT and PLA are one of the most widely used degradable materials at present, and there is a large market space under the support of policy. As for PBAT, the company is building a 60,000-ton PBAT project which is currently in the installation phase and is expected to be completed by the end of September 2021 and enter the commissioning phase. In terms of PLA, as a technological breakthrough in the company's business under research, the one-step synthesis of PLA technology has achieved pilot-scale success in the company's 100-ton pilot line in July 21.
At the same time, PLA, which is synthesized by two-step lactide process, is under development and is currently in the stage of small-scale test.
Investment advice: with the gradual commissioning of the company's projects under construction, we expect the company's 21-23 net profit to be 1.62 million, maintaining the company's "buy" rating.
Risk hints: macro-economy is not as expected; industry development is not as expected; capacity construction is not as expected, etc.