The company publishes its semi-annual report for 2020. 2020H1 achieved operating income of 1.677 billion yuan (+ 56% compared with the same period last year), net profit of 131 million yuan (+ 90% year-on-year), and non-return net profit of 104 million yuan (+ 48% compared with the same period last year). Among them, Q2 realized deduction of 100 million yuan in non-return net profit in a single quarter (year-on-year + 31%, month-on-month + 50%). Faced with rising raw material prices, shipping difficulties and other adverse situation, the company's Q2 performance exceeded expectations.
New production capacity has been released steadily, and production and sales have continued to grow. The company seizes the historical opportunity of downstream improvement of quality requirements, environmental protection and epidemic clearance of small and medium-sized enterprises to rapidly expand production capacity. In the first half of the year, the company's new production capacity includes: IPO investment project; self-financing construction of BOPP film line, special paper machine project, waste heat boiler expansion and upgrading project. 21Q2's sales of cloth, paper and film-based tape increased by-7%, 45% and 14% respectively compared with the same period last year, and increased by 23%, 29% and 46% respectively compared with the same period last year. With the production of convertible bond raising projects and other self-financing projects in the future, the company's production and sales will continue to grow.
The price transmission is relatively smooth, and the gross profit margin is still higher. 21Q2 is facing a relatively unfavorable external macro environment, including rising prices of raw materials, large exchange rate fluctuations, soaring shipping costs and so on. The company reduces the adverse impact by raising prices for many times in batches, locking foreign exchange, and actively negotiating with the downstream. At the same time, the improvement of scale effect and the enhancement of integration also reduce the production cost of the company. The average sales price of 21Q2's cloth, paper and film-based tape increased by 18%, 12% and 28% respectively compared with the same period last year, up 2%, 8% and-1% respectively from the previous year; and the comprehensive gross profit margin was 14.11%, an increase of 0.9pct from the previous year.
The business of new materials continues to advance. At present, the company has laid out six business departments covering four major plates: degradable adhesive materials, automotive adhesive tapes and new materials, consumer electronic adhesive materials, and medical adhesive materials. is continuously improving team building, supporting hardware construction, product research and development and certification, inspection iteration and other related work. We are optimistic that the company extends from traditional civil tape to all kinds of special tape to create a medium-and long-term business growth point.
Raise the company's profit forecast. We forecast that the company's annual return net profit in 2021-22-23 will be 2.5 billion yuan for the company, and 2.16 yuan for EPS 1.50, 1.82 and 359 million yuan for the current price, respectively, corresponding to PE19.6/16.1/13.6 times the current price. Give 2022 20 times PE, raise the target price to 36.40 yuan, maintain the "buy" rating.
Hint: the price of raw materials fluctuates greatly, and the production progress of the new project is not as expected.