Core point of view
The company is highly competitive: the polyurethane industry where the company is located is a fully competitive industry. The average start-up of TPU is 60%, and the average start-up of soles and pastes is 4-50%. The company is almost full of production and sales every year, and the main customers include large international enterprises such as Huntsman and Japan World Union Group, which can be seen from customers' recognition of the company. Customers' recognition of the company mainly comes from the company's pursuit of product quality and the accumulated knowhow, which can quickly respond to customer needs.
Industry demand has changed: we have observed two important changes in the polyurethane material industry: first, the new energy vehicle enterprises represented by Tesla, Inc. and NIO Inc. chose PU synthetic leather instead of leather and PVC artificial leather, and all selected low-VOC environment-friendly PU leather, and the demand for solvent-free high-end leather polyurethane is expected to increase. Secondly, polyurethane materials are made into power battery cushions and insulation patches to provide reliable cushioning, sealing, heat preservation and vibration isolation for lithium-ion batteries, which is an important incremental demand in the future. By 2025, the global demand for new energy vehicles will reach 22 million. According to the calculation of the value of lithium battery cushions for bicycles, assuming that the permeability reaches 100%, the global market size will reach 11 billion yuan.
The company ushered in business improvement: with Fujian Huide's capacity climbing, the company will break the capacity bottleneck, and with the growth of high-end demand, the product structure of the company will be optimized in the future, and the net profit per ton is expected to increase. In addition, the sharp rise in raw material costs in 21 years has eroded the company's profits, and the company's gross profit margin has fallen from about 20% to about 12% of 2021Q3. In 22 years, with the gradual decline of raw material costs and the upgrading of product structure, gross profit margin is expected to gradually return to the normal level.
Financial Forecast and Investment suggestion
Based on the judgment of the growth of demand and the progress of the company's production capacity, we predict that the company's EPS from 2021 to 2023 will be 1.25,2.35,3.45 yuan respectively. According to the comparable company's 27x PE in 2022, the target price was given a target price of 63.57 yuan and a buy rating for the first time.
Risk hint
Raw material prices have risen sharply; demand is lower than expected; price transmission is not timely; production progress is not as expected; capacity digestion is not as expected; market capacity of new applications is not as expected; valuation decline risk.
