The company released its 2021 annual report, achieving revenue of 2,627 million yuan, an increase of 40.94% over the previous year, and net profit of 386 million yuan to the mother, an increase of 67.89% over the previous year. The performance was in line with expectations. Maintain the increase in holdings rating.
The company issued a preliminary performance increase announcement for the first quarter. It is expected to achieve net profit of 123-143 million yuan in the first quarter of 2022, an increase of 80%-110% over the previous year.
Key points to support ratings
The performance was in line with expectations. The company released its 2021 annual report. It achieved operating income of 2,627 million yuan in 2021, an increase of 40.94% over the previous year; net profit attributable to shareholders of listed companies was 386 million yuan, an increase of 67.89% over the previous year. Net profit after deducting non-recurring profit and loss was 321 million yuan, an increase of 76.47% over the previous year. Among them, the fourth quarter achieved operating income of 740 million yuan in a single quarter, an increase of 42.49% over the previous year, the net profit of Guimu was 115 million yuan, an increase of 92.04% over the previous year, and the net profit of the mother after deduction was 88 million yuan, an increase of 69.68% over the previous year. In addition, the company announced an advance performance increase announcement for the first quarter. It is expected to achieve net profit of 123-143 million yuan in the first quarter of 2022, an increase of 80%-110% over the previous year.
Domestic substitution accelerated, and the screen display and semiconductor materials business continued to grow rapidly: in 2021, screen display materials benefited from increased localization rates and the transfer of global panel production capacity to the country, and the company's new product panel photoresist entered the market. The company achieved sales revenue of 1,300 million yuan throughout the year, an increase of 42.26% over the previous year, and a gross profit margin of 42.35%, a decrease of 0.91% compared to the same period last year. Semiconductor materials were affected by increased downstream demand, achieving annual sales revenue of 553 million yuan, an increase of 35.23% over the previous year, and a gross profit margin of 38.42%, a year-on-year decrease of 0.39%. In addition, according to the company's easy response on the Shenzhen Stock Exchange, the company's self-developed i-Line photoresist and KRF lithography supporting BARC materials are already in the client-side import and verification stage.
It is expected that the screen display and semiconductor materials business will continue to grow, driven by the release of new products.
Demand for some pharmaceutical intermediates has increased dramatically, and business revenue has increased significantly. According to the company's interaction on the Shenzhen Stock Exchange, the pharmaceutical intermediates produced by the company mainly include bromoacetonitrile, tert-butyl bromoacetate, cyclohexylbenzene, chlorocyclohexane, etc., and are also supplied to upstream API factories of pharmaceutical companies such as Pfizer, Huahai, and Haizheng. According to the company's annual report, the company currently has a production capacity of 5,500 t/a for various types of halogenated hydrocarbon medical intermediates, and another 2,230 t/a halogenated hydrocarbon medical intermediate production capacity is under construction. With the gradual increase in the effective production capacity of existing pharmaceutical intermediates and the orderly advancement of construction production capacity, the company is expected to benefit from a sharp increase in demand from downstream customers in the pharmaceutical intermediates sector and the increase in pharmaceutical intermediate production in 2022 and 2023, and the profit level will remain high.
valuations
Profit forecasts were raised due to a sharp increase in downstream customer demand for pharmaceutical intermediates. The company's EPS is expected to be 1.14 yuan, 1.29 yuan, and 1.30 yuan respectively in 2022-2024. The PE corresponding to the current stock price is 25.9 times, 22.9 times, and 22.7 times. I am optimistic that production and sales of pharmaceutical intermediates will continue to flourish in the future, and maintain the rating for increasing holdings.
The main risks faced by ratings
Increased competition in the industry led to a decline in gross margin, and the progress of LCD panel production and the localization rate of upstream materials fell short of expectations.