Incident: The company released its 2021 performance forecast. The net profit returned to the mother in 2021 is estimated to be 1,355-1,405 million yuan, an increase of 88%-95% over the previous year; the net profit of the mother in Q4 alone was 382-432 million yuan, an increase of 41.5%-60% over the previous year and an increase of 3.2%-16.8% over the previous month. The company's profits continued to grow month-on-month, and its performance exceeded market expectations.
Comment: Optical films and new energy films are growing strongly, and profit margins are constantly increasing. The company is positioned as a new materials platform company. The new materials business continued to grow in 2021, optical materials and new energy materials grew rapidly, and new orders increased significantly over the same period last year. As demand for high-end products rises rapidly, the company actively adjusts its product structure, production capacity is skewed towards high-value-added products, and the proportion of new products continues to rise. The company's gross margin is expected to increase further. The company's gross margin is expected to increase further. The company will gradually transform from an enterprise with innovative film materials such as optics, photovoltaics, and information. The gross margin for the 2019 to 2021 Q3 was 12.11%/21.75%/33.32%, respectively, and the net interest rate was 4.12%/12.99%/22.96% respectively. The gross profit margin and net interest rate have continued to increase. At the same time, the company's new production line was put into operation at an accelerated pace, further improving efficiency.
Production capacity expanded smoothly, and key customers expanded steadily. In the second half of the year, 200 million square meters of optical film and 500,000 tons of high-performance film projects were put into operation one after another. The production capacity of optical films and high-performance films increased dramatically, and the company fully transformed high-end film performance in the second half of the year. During the reporting period, the company won bids for brands such as Hisense, Xiaomi, and BOE many times, and its share of the domestic market continued to increase. On the overseas side, the company's share in the supply of international brands such as Samsung and LG has increased dramatically: the company's optical-grade raw material synthesis, optical substrate stretching, and optical film microforming have all been fully recognized by Samsung. The number of orders received this year has steadily increased month by month, and it has begun to develop optical films for new models in 2022 and 2023, and has become the core supplier of Samsung films.
Implement an equity incentive plan to demonstrate the company's confidence in development. In July, the company launched the 2021 equity incentive adjustment plan. After the adjustment, the number of restricted shares to be granted is 126419.62 million shares. Based on 2020 net profit, the 2021-2023 net profit growth rate will not be less than 60%, 110%, and 160%, respectively.
Investment advice: The company's net profit from 2021 to 2023 is estimated to be 1,422/20.13/2,544 billion yuan respectively. The corresponding PE was 22.69/16.02/12.68 times, respectively. The first coverage gave a “buy” rating, corresponding to the target price of 39.37 yuan/share.
Risk warning: Market expansion falls short of expectations, performance fluctuations due to the impact of the epidemic, etc.