1H21 performance is basically in line with expectations.
The company announced 1H21 results: revenue 2.03 billion yuan, year-on-year + 72.6%; return to the mother net profit of 270 million yuan, the same period last year was-250 million yuan, a substantial turnaround from losses to profits. The performance is basically in line with the previous forecast.
1) the industry is booming, and the company has achieved a total increase in volume and price. Sales volume: the sales volume of all kinds of glass in 1H21 is + 15% to 1706 square meters compared with the same period last year, mainly due to the completion of the upswing, driving a high demand in the industry; price: under the prosperous situation of both supply and demand, the price of glass continues to rise: the average price per case of 1H21 company is about 115 yuan, which is + 51% year on year, which is 8 yuan higher than the industry average; 2) the gross profit per case increased year on year. Benefiting from the increase in unit price, 1H21's gross margin per box is + 29 yuan to 41 yuan compared with the same period last year. But at the same time, due to soda ash (the average price of 1H21 light / heavy soda ash is 17% to 1725 yuan / ton compared with the same period last year), fuel, mineral raw materials and other raw materials have increased, and the company's cost per box has increased by + 10 yuan to 74 yuan compared with the same period last year, resulting in a lower gross profit per box than the unit price. 3) the "five Unification" strategy has achieved results, and the cost per box has decreased slightly. 1H21 company cost control results, per box management / sales costs from-1.20-0.20 yuan to 7.6cm 2.3 yuan, driving the company's net profit per box of about 18 yuan, to achieve a turnround to profit; 4) purchase raw materials in advance, cash on hand slightly decreased. 1H21 company cash on hand-28% to 580 million yuan, according to the disclosure of the company, mainly due to its advance procurement of soda ash and other raw materials.
Trend of development
2H21 production capacity concentrated release, volume and price rise continue to contribute to high elasticity. Quantity: the company ignited and resumed production of two production lines (a total of 1000t/d) in June, and acquired Fujian Longtai first line (700t / d) in mid-July. At present, the company has 13 production lines, with a total daily melting capacity of 6900t/d (+ 35% compared with the first half of the month). At the same time, the company plans to put Fujian Longtai second line into production by the end of the year, when the daily melting volume will continue to rise to 7500t/d tons. We estimate that under the promotion of resumption of production and acquisitions, the company's sales are expected to continue to increase in the second half of the year. Price: we are optimistic that in the second half of the year, due to strong completion + peak season demand + replenishment motivation to support prices steadily upward, contribution to excess elasticity. Cost: we estimate that soda ash and petroleum coke rings have risen more than 1H21, but the company has stocked raw materials ahead of time, and prices have risen steadily, and gross profit margins are expected to continue to rise.
High-quality float platform, long-term asset expansion, cost reduction and efficiency can be expected. The company is located in China National Building Material's float glass platform, we expect the company will continue to acquire assets and internal integration in the future, the size of assets is expected to continue to rise. At the same time, the company opens the "five unification" strategy, the group unifies-manages and refines various expenses, we are optimistic that the company is expected to move towards the road of high-quality development, and there is broad room for long-term improvement.
Profit forecast and valuation
Due to the upward revision of the volume and price hypothesis, we have raised 2021Universe 22e EPS6%/14% to 0.53Universe 0.82 yuan, and the current share price corresponds to 2021Universe 22e Pamp E as 7.0x/4.5x. We maintain our win-win industry rating, raising the company's target price by 30% to HK $5.60, corresponding to 21max 22e 9.1x/5.9xP/E, due to the improvement in glass scene, which has 31.1% upside compared to the current share price.
Risk.
The demand for completion is lower than expected; the production capacity on the supply side is higher than expected; and the cost control fee is lower than expected.