Event: the company released its annual report for 2021, with an income of 2.36 billion yuan in 2021, an increase of 13.96% over the same period last year, a net profit of 110 million yuan, a decrease of 47.74% over the same period last year, and a non-return net profit of 100 million yuan, down 49.29% from the same period last year. It is proposed to pay a cash dividend of 1 yuan (including tax) for every 10 shares. In the first quarter of 2022, the company achieved revenue of 480 million yuan, an increase of 1.33% over the same period last year, and net profit of 7.37 million yuan, down 83.18% from the same period last year, deducting 6.32 million yuan of non-return net profit, down 85.26% from the same period last year.
Comments:
The steady growth of PVC and the bright growth rate of PE. The company's revenue grew by 13.96% in 2021, and the revenue of PVC, PPR and PE by product was 17.1 yuan, 2.3 yuan and 390 million yuan respectively, up 10.52%, 0.11% and 36.54% respectively over the same period last year. The income of South China, which accounted for the largest proportion by region, was 1.76 billion yuan, up 10.69% from the same period last year, and the income of East China was 51.63 million yuan, a 20-fold increase over the same period last year. East China, one of the regions with the greatest demand, made a breakthrough.
The company's raw material procurement costs have risen, gross profit margins have declined, and 22Q1 has improved. The main costs of the company are petrochemical industry chain products, such as PVC, PP and so on. The average purchase price of raw materials is expected to rise under the background of rising crude oil prices in 2021. The company's gross profit margin of PVC, PPR and PE fell by 8.45pct, 1.46pct and 5.99pct to 14.25%, 31.78% and 13.79%, respectively. The company's expense rate is well controlled, and due to the decline in gross profit margin, the net profit rate in 2021 is only 4.71%. We can see that the gross profit margin and net profit margin of the company Q1 have rebounded from the previous month, and the most difficult moment of raw material pressure may have passed.
The pattern of the plastic pipeline industry is scattered, the degree of concentration has room for improvement, and corporate mergers and acquisitions are on the brink. There are more than 3000 large-scale plastic pipeline production enterprises in China, and the pattern is relatively scattered. The pipeline industry has entered a stage of low growth, and the industry concentration is getting higher and higher. at present, the market share of CR20 is about 40%. We believe that there is still room for concentration. The company intends to issue shares and pay cash to acquire all the shares of Kangtai plastic Technology Group Co., Ltd. after the completion of the acquisition, the company's production capacity is expected to be greatly increased.
For the first time, it is given a "better than the market" rating. The trend of increasing concentration in the pipeline industry is expected to continue, the company's acquisition plan is on track, and the logic of growth is clear. We estimate that the return net profit of the company in 2022 to 2024 is 1.95,2.63 and 291 million yuan respectively, corresponding to the EPS of 0.54,0.73,0.81 yuan per share respectively. We give the company's PE in 2022 16 times, with a reasonable value range of 8.64 yuan and 9.72 yuan. For the first time, it is given a "better than the market" rating.
Risk hint. Competition aggravates the risk, and the risk of raw materials rising sharply.