The overall performance in 2021 is slightly higher than expected, and 22-year new capacity will hit the ground as scheduled. In 21 years, the company had an income of 5.93 billion yuan (YOY+17.22%), a gross profit margin of 32.8% (YOY increased by 10.43%), a net profit margin of 23.4% (YOY increased by 9.12%), and a net profit of 1.385 billion yuan (YOY+92.3%).
In terms of performance, the company had previously issued a notice and the market had expectations, but combined with the revenue and gross margin performance of the four major new material sectors disclosed in the annual report, as well as the partial consolidation of 300000 tons of production capacity last year, we believe that the overall performance of the company is still slightly higher than we expected. At the same time, the company looked forward to each segment in the past 22 years. With the gradual consolidation of 300000 tons of production capacity and the continuous commissioning of 200000 tons of optical production capacity of 1H22 and 700 million square meters of new coating workshop of 2H22, the profit contribution of new materials reached 88% in 2022.
The traditional packaging film continues to shrink and the production capacity of new materials is released, boosting profits. The company has a production capacity of 560000 tons at the end of 2020, of which the optical grade production capacity of new materials is about 200000 tons. in 2021, the company added six new lines totaling 300000 tons, driving overall production to 524000 tons, an increase of 16.4% over the same period last year, and sales of 510000 tons. year-on-year growth of 3% (inventory removal led to sales higher than output in 2020), revenue increased by 17.2%, gross profit increased by 71%, and net profit increased by 92.3%. Among them, the four major new materials sectors, namely, optics, new energy, heat shrinkage and information, achieved revenue of 4.086 billion, contributed 69% of revenue, up 15% from the previous month; realized gross profit of 1.46 billion yuan, accounting for 74.7% of the overall gross profit, up 14.5% from the previous month; the gross profit of the whole new materials plate increased by 112% year on year, much higher than the company's overall 71% level.
The improvement of new material products, scale effect to resist the rise in raw material costs, 4Q21, 2H21 gross profit margin month-on-month performance. The 21-year 1Q-4Q gross profit margin of the company is 32.7%, 34.7%, 32.6%, 31.8%, 33.7%, 32.2%, 33.2%, 21.6%, 24.1%, 23.1%, 24.3%, 23.1%, 23.1%, 23.1%, 23.1%, 23.1%, 23.1%, 23.1%, 23.1%, 21.6%, 23.1%, 23.1%, 23.1%, 23.1%, 23.1%, 23.1%, 23.1%, 23.1%, 23.1%, 23.5%, respectively. The net profit margins of 1H21 and 1H22 are 21.6%, 21.1%, 23.1% and 23.7%, respectively. Different from market expectations, although raw materials fluctuated sharply in 2022, while the company's gross profit margin and net profit margin remained stable, the main reasons are: 1) the proportion of new materials increases and the price transfer ability is strong; 2) raw materials are purchased with volume to stabilize the fluctuation of gross profit margin; 3) the new production capacity has significant scale and cost advantages over its peers.
The production capacity of base film and coating continues to release, the proportion of new materials increases, and the company's market share and gross profit index are expected to continue to lead the industry. The company disclosed that 1H2022 will continue to put 4 production capacity totaling 200000 tons, while in the second half of the year, the new coating capacity of 700 million square meters will be gradually released (the original 300 million square meters, a total of 1 billion square meters), based on which we believe that: 1) the new production capacity will continue to climb, production and sales will continue to increase; 2) the coating capacity will further bring profit flexibility.
Risk hint: COVID-19 epidemic situation, Russia and Ukraine situation brought macro-uncertainty, production line installation production lower than expected.
Investment advice: raise your earnings forecast and maintain your "buy" rating.
It is estimated that the 2022-2024 homed net profit will be 100 million yuan in 54-69-88 (the forecast for 22-23 will be raised by 12%), representing a year-on-year growth rate of 60,450.31%. It is expected that the company's quarterly improvement and annual high growth will be a high probability event. The current share price is only 10.3 times the 22-year PE, far lower than its peers and maintaining a "buy" rating.