Events:
The company released its annual report for 2021, with revenue of 670 million yuan, an increase of 17.68% over the same period last year, and a net profit of 162 million yuan, an increase of 9.35% over the same period last year. In the second half of 2021, revenue reached 363 million yuan, an increase of 11.91 percent over the same period last year, and the net profit returned to the home was 68 million yuan, down 22.09 percent from the same period last year.
Comments:
1. Continuous optimization of product structure and outstanding ability of cost management and control.
In 2021, the company's product structure continued to be optimized, and the proportion of income from synthetic mica-based pearlescent pigments increased steadily. In the revenue structure, the revenue of natural mica-based pearlescent pigments was 348 million yuan, an increase of 9.09% over the same period last year, and the proportion of income decreased from 4 pct to 52%. The income of synthetic mica-based products was 272 million yuan, an increase of 37.85% over the same period last year, increasing by 6 pct to 41%. The income of glass sheet-based, silicon oxide-based and directly sold synthetic mica powder was 4498.7, 301.8 and 2.02 million yuan respectively, accounting for 6.7%, 0.5% and 0.3%, respectively.
In 2021, the company's total sales of pearlescent pigments and synthetic mica were 16700 tons, an increase of 17.5% over the same period last year, and the capacity utilization rate exceeded 120%. At present, the production of the company is close to the limit of production capacity. The price and cost of per ton of pearlescent pigment in 2021 are 4.00 yuan and 19.7 million yuan per ton, respectively. The cost per ton is the same as that in 2020, and the average price increases slightly. The company's comprehensive gross profit margin (deducting taxes and surcharges) increased from 49.9% to 50.0%. The market price of raw materials increased in the second half of 2021, and the company's own depreciation and amortization increased compared with the first half of the year; under both internal and external unfavorable factors, the company fully tapped the potential of cost reduction and efficiency, and maintained a high and extremely stable gross profit margin for the whole year.
2. Investment in R & D has increased by 65%, and dilution of expenses will increase the net interest rate by 1.56 pct to 22.10% year-on-year in 2021, resulting in a corresponding decline in the net interest rate by 1.61 pct to 25.25%. Among them, the sales expense rate increased by 0.82 pct to 5.14%, mainly through the launch of cosmetic-grade pearlescent pigment new products and other activities to increase business development efforts; administrative and other expense rates increased by 2.44 pct to 15.25% compared with the same period last year, mainly due to the increase in administrative expenses during the listing process and the investment in new product research and development; the financial expense rate decreased by 1.70 pct to 1.71% compared with the same period last year.
In September 2021, the company jointly developed new energy battery materials with Zhejiang University, and the annual R & D expenditure increased significantly by 65.19% to 48.4 million yuan compared with the same period last year; if we simply restore the new 19 million R & D investment and the reduced R & D government subsidy of 8.5 million yuan, the company's potential homing net profit level will reach 190 million yuan, in line with market expectations. In the future, the company will continue to invest in R & D and marketing expenditure to achieve product category expansion and brand value establishment, but with the gradual release of 30,000 tons of new production capacity, the cost will be significantly diluted. Under the solid gross profit margin level, the net profit margin increases obviously.
3, capacity release and new business development, the company has long-term sustainable high growth attributes 1) project construction: the first phase of the company's second-phase factory building capacity of 6000 tons of pearlescent pigment has been completed, and the total production capacity has increased by more than 40%. It is expected that production will be reached gradually in the second quarter. In the next 3-4 years, 30,000 tons of pearlescent pigment production capacity and supporting synthetic mica production capacity of the project will be released in an orderly manner, supporting the company's performance growth.
2) New product research and development: based on the technical accumulation of previous joint research and development with Zhejiang University, the company will launch new energy material products related to synthetic mica (such as diaphragm and diaphragm), which the company expects to contribute to its revenue source in 2022. 3) Market development: following the winter product launch of cosmetic pearlescent pigment in 2021, the company will also hold regular product release activities to improve the company's reputation in the fashion world, and through the establishment of a marketing center in Shanghai, gradually transfer the operation of its marketing team to Shanghai. 4) extension expansion: the company intends to use the capital market platform to timely participate in M & An activities to speed up business expansion and realize the expansion of products and channels.
Investment suggestion: the company's expansion in the field of new energy battery materials will significantly enhance the ceiling of the company's field in the medium to long term. In the short and medium term, we are optimistic about the upward elasticity of the company's profit margins and the performance growth brought about by the release of production capacity as scheduled in the next few years. Considering only Pearl's main business and endogenous growth, we estimate that the company's revenue in 2022-2024 will be 8.53,11.13 and 1.495 billion yuan, and the return net profit will be 2.18,2.88 and 399 million yuan. Take into account the company's high growth and low valuation, maintain the "buy" rating.
Risk tips: 1) the price of chemical raw materials rose higher than expected; 2) the production capacity of fund-raising projects was lower than expected; 3) the new business expansion was not as expected.