Profitability has improved in an all-round way, and the impact of dual control in the near future is limited: the company achieved a profit of 6.471 billion yuan (RMB, the same below) in the first half of 2021, an increase of 39.6% over the same period last year; gross profit margin increased from 21.7% to 26.2%. The return net profit was 603 million yuan, an increase of 49.3% over the same period last year, in line with Yingxi's previous expectations.
During the year, the company's polymer business revenue was 1.942 billion, an increase of 28.92% over the same period last year, and its operating profit margin was 21.24%, compared with 16.75% in the same period. Silicone revenue was 1.61 billion, up 41.97% from the same period last year, and operating profit margin was 25.94%, compared with 8.09% in the same period. Refrigerant revenue was 1.223 billion, up 17.7% from the same period last year; operating profit margin was 9.68%, compared with 7.35% in the same period. Production and sales of the company's three major businesses began to improve after the fourth quarter of last year, and prices bottomed out. According to the latest product prices, the PTFE of polymer business has increased by more than 60% compared with the same period last year. PVDF has doubled year-on-year, and the price of lithium grade has exceeded 300000 / ton. The demand for organosilicon is higher than expected, recently affected by the production and electricity limitation of industrial silicon in the upper reaches, the price of DMC has exceeded 60,000 yuan / ton, and the refrigerant products with relatively stable performance in the first half of the year have also shown a good momentum of growth in the near future. In view of the recent situation of double control of power limitation, as the company's daily power load is mainly used for the production of chlor-alkali and other related products, the impact on the production of major products is limited, and the company's supply of raw materials is stable at present. however, in the short term, the increase in the price of upstream raw materials has a certain impact on the cost side, and its sustainability is expected to be limited.
For the supply of lithium cathode materials, it is difficult to reverse the short-term supply of PVDF: PVDF is mainly used as a positive adhesive in lithium cathode. We estimate that the demand for PVDF for lithium electricity will be about 20, 000 tons this year and will grow to 110000 tons per year in 2025. From the supply side, the total global PVDF capacity is about 110000 tons, represented by Dongyue Group in China, with an annual production capacity of 10,000 tons, including 3000 tons of PVDF for lithium power. Judging from the timetable of the new capacity, we expect that most of the new PVDF capacity will not be put into production until at least the end of next year, and the new capacity for lithium electricity is relatively small, and the company's additional 10,000 tons of PVDF capacity will not be officially put into production until the fourth quarter of next year at the earliest.
We assume that the domestic operating rate has increased greatly since the beginning of this year, and the supply of overseas capacity continues to be limited, then the growth of actual output of the industry this year and next year will be far less than the growth of demand, in which the supply of lithium PVDF falls short of demand, and PVDF prices will remain extremely in short supply in the coming year or even longer, and prices will continue to operate at a high level.
Gaojing is expected to continue, raising the target price to HK $27.19 and maintaining the buying rating: combined with the current supply and demand situation in the industry, we expect the overall demand for the company's products to grow significantly this year, including a substantial increase in the prices of PTFE, PVDF and DMC products, and is expected to maintain high levels in the future. Hydrogen energy business in the future under the guidance of national policy will achieve rapid volume and rapid growth, market capacity is expected, and is expected to submit a spin-off listing application in the first half of next year. Based on the upward momentum of the three core businesses, the high growth of PVDF in the new energy sector and the expectation of new production capacity next year, the company will be given a 17 times PE valuation hub corresponding to the target price of HK $27.19 according to the 2022 earnings forecast.