Event
In the first half of 2021, the company achieved operating income of 10.674 billion yuan, an increase of 139.88% over the same period last year, and a net profit of 5.879 billion yuan, an increase of 205.98% over the same period last year, deducting 5.85 billion yuan of non-return net profit, an increase of 204.29% over the same period last year. 2021Q2 realized operating income of 3.94 billion yuan per quarter, an increase of 7.16% over the same period last year, and net profit of 2.143 billion yuan, an increase of 19.58% over the same period last year, deducting 2.121 billion yuan of non-return net profit, an increase of 18.00% over the same period last year.
Continuous promotion of cross-domain production capacity
The company continues to promote production capacity construction and optimization and upgrading, and has built three glove production bases in Huaibei, Shandong, and Zibo, Shandong. As of June 30, 2021, the company's annual production capacity of disposable gloves has reached 51 billion. During the reporting period, the annual production capacity increased by about 15 billion, with a growth rate of more than 40%.
As of July 2021, the company has an annual production capacity of 52.1 billion disposable gloves (including 28.1 billion nitrile gloves), and a new nitrile glove production line is expected to be completed every month in the third quarter. According to the company announcement, it is expected that the annual production capacity of 2022H1 disposable gloves will reach 120 billion, and it is expected to become the world's largest supplier of disposable gloves in the future.
Advantages made in China, global marketing market
Benefiting from the competitive advantage of "made in China", the company has set up an efficient supply chain integrating procurement, production, warehousing and logistics and connecting global sales and marketing networks. 1) Raw materials: China Petroleum & Chemical industry is mature, providing sufficient, stable and cost-effective raw materials for production. The company and Shandong Haode Latex have set up a holding subsidiary Haode Plastics to produce nitrile rubber latex, which has been officially put into production in the second quarter. 2) production: the company is promoting a new cogeneration model, which can further reduce energy costs. The company's production base is strategically laid out, with sufficient labor and convenient transportation, which helps to further improve cost-effectiveness. 3) warehousing logistics: the company signs a long-term strategic cooperation agreement with the head Shipping Group, and makes use of the company's overseas warehouse advantages to quickly realize product sales.
The company adheres to the global marketing strategy, establishes global marketing centers in the United States, Canada, Germany, Singapore, Hong Kong, Japan and Shanghai, and plans to build official brand stores in cross-border e-commerce channels. it has served more than 10000 customers from more than 120 countries and regions around the world, including large international medical product wholesalers, retailers, trading companies, catering service enterprises, manufacturing enterprises, etc. There are more than 300 sales staff. While paying attention to overseas marketing, the company is also actively expanding the domestic market and building brand influence, including opening online brand flagship stores and implementing brand promotion plans.
COVID-19 epidemic promotion policy to strengthen the use of disposable gloves and enhance public awareness of protection the National Health and Family Planning Commission of China issued the Technical Guide for novel coronavirus infection Prevention and Control in Medical institutions (first Edition) in January 2021, which requires medical personnel to wear disposable gloves when necessary, as well as disposable gloves for non-medical industries. The guidelines for the protection of key groups in key places issued by the State Health Commission on August 13, 2021 pointed out that drivers, flight attendants, cleaners, porters and other staff responsible for entry trains or cars should wear disposable gloves during their work; airport stevedores and other loaders who are in direct contact with international cold chain goods, international medium and high-risk general goods should wear disposable medical rubber or nitrile gloves. Policy guidelines and increased public awareness of protection will help accelerate the growth of demand for disposable gloves.
Profit forecast and valuation rating
In view of the pressure on the price of disposable gloves, we reduce our revenue forecast for 2021 to 235.85, 215.32, and 22.603 billion yuan in 2023 (compared with 255.61, 262.22, 24.747 billion in the previous year), with year-on-year increases of 70.45%, 8.70%, 4.98%, respectively. The estimated homing profit is 100.32 Universe 60.82 Universe 6.675 billion Yuan (the previous profit is 121.91 million RMB 103.39 Universe 7.415 billion Yuan), and the corresponding EPS is 27.39 Universe 16.60 Universe 18.22 Yuan per share, respectively. We believe that Intech Medical has initially formed a strong leading edge in the glove field at this stage, and in the medium to long term, the core development logic of the company is "China advantage, global market", and maintain the "buy" rating.
Risk hint: the risk of global overcapacity of disposable gloves; the risk of price fluctuation of disposable gloves; the construction progress of the company's capacity project is not as expected.
