In 2021, the net profit of home ownership increased by 168.7% over the same period last year, which was in line with market expectations: revenue of 15.844 billion yuan, + 57.7% year-on-year; net profit of 2.075 billion yuan, + 168.7%; and corresponding earnings per share of 0.92 yuan, in line with market expectations.
Trend of development
The performance driven by PVDF and R142b increased significantly: the chemical industry was booming in 2021, especially due to the mismatch between supply and demand under the rapid growth of demand for new energy vehicles. The prices of PVDF and 142b rose from 110,000 yuan / ton and 28,000 yuan / ton at the beginning of 2021 to 465,000 yuan / ton and 195,000 yuan / ton, respectively, driving the company's profitability to increase significantly, with a gross profit margin of + 10.58pct to 32.93%. From a business point of view, 1) fluorinated polymer materials: revenue + 51.17%, of which PVDF revenue + 176.04%, segment performance + 232.17%) refrigerant:
Revenue + 61.52%, of which R142b income + 447.02%, segment performance + 236.55% x 3) silicone: income + 70.52%, segment performance + 350.41% x 4) dichloromethane, PVC and caustic soda:
Revenue + 25.62%, segment performance + 223.01%.
Continue to maintain a higher dividend: the company plans to pay a total cash dividend of 621 million yuan in 2021, and the dividend ratio of about 30% will continue to maintain a high level.
High-intensity capital expenditure supports future growth: capital expenditure in 2021 is 4.803 billion yuan, + 152.74% compared with the same period last year, accounting for about 57.88% of fixed assets at the end of 2021. The main new capacity includes 10,000 tons of PTFE, 5000 tons of FEP, 300000 tons of organosilicon monomers and 200000 tons of downstream deep processing projects, 100000 tons of monochloromethane and 100000 tons of other methane chlorides, 30,000 tons of anhydrous HF, etc. The new 10,000 tons of PVDF has been fully approved, and the company expects that the company's PVDF production capacity will reach 25,000 tons / year after it is put into production in October 2022. The company's long-term planning to 2025 PVDF production capacity will increase to 55,000 tons / year, R142b production capacity will increase by 100,000 tons / year, and the future growth momentum will be strong.
Profit forecast and valuation
We expect the boom of lithium battery PVDF to continue, maintain 2022 and introduce 2023 profit forecast, the estimated net profit is 3.845 billion yuan and 4.945 billion yuan respectively, corresponding to 1.71 EPS 2.19 yuan in 2022-2023, and the current stock price is 5.0 PE 3.9x in 2022-2023. We believe that, benefiting from the rise of industries such as lithium power and 5G, the company is expected to become an important supplier of high-end fluorine materials around the world, maintaining its target price of HK $16, corresponding to a price-to-earnings ratio of 7.6x5.9x for 2022-2023 and a 60 per cent upside, and maintaining an outperforming industry rating.
Risk.
The risk of price fluctuation of fluorosilicon chemicals; the tightening of refrigerant quota, fierce competition in the third-generation refrigerant market; and the development of hydrogen energy industry is not as expected.
