Event: the company issued a pre-increase announcement of annual performance in 2021. In 2021, the company is expected to achieve a net profit of 170 million yuan to 190 million yuan, an increase of 58.09% to 76.69% over the same period last year, and an increase of 58.56% to 77.32% over the same period last year. The large increase in annual performance is mainly due to (1) the expansion of the company's production capacity, strong downstream demand, and a significant increase in product sales; (2) the proportion of sales of wiredrawing air cushion materials with high gross profit margin continues to increase. 2021Q1-3 achieved a net profit of 150 million yuan, an increase of 113.72% over the same period last year. 2021Q4 is expected to achieve a net profit of 0.20 billion yuan, with a year-on-year change of-47.30% and 6.54%. We think that the performance of the fourth quarter is mainly affected by two aspects: first, the increase in shipping charges in the first three quarters, the shortage of shipping space, the disordered delivery rhythm of customers downstream of the company, missing the peak season of brand sales, and then affecting the rhythm of issuing orders. Second, the epidemic lasted too long, and the downstream customers of the company were cautious about the expectations of overseas consumers.
Focus on the main business, strong ability of independent innovation, substantial expansion of production capacity, optimistic about the future development of the company. (1) the company has always adhered to the main business, focusing on composite materials for 30 years, and the revenue share of wiredrawing air cushion materials with high gross profit margin continues to increase. (2) the company has strong ability of independent innovation, obvious leading advantages in R & D and production technology, reflecting excellent management quality. (3) with the 450 square meters of drawing base cloth gradually put into production, after breaking through the capacity bottleneck, the company's performance is expected to show rapid growth and is optimistic about the future development of the company.
Profit forecast and investment advice. It is estimated that the EPS of the company from 2021 to 2023 is 1.80,2.25,2.77 yuan per share respectively. With reference to the company's capacity expansion and future growth, the company is given a 2022 PE valuation of 20 times, corresponding to a reasonable value of 44.99 yuan per share, maintaining a "buy" rating.
Risk hint. The risk of raw material price fluctuation, the risk of falling unit price of sales, and the risk that capacity expansion cannot be effectively digested.