Event description
According to the company's quarterly report for 2022, 2022Q1 achieved an income of 1.11 billion yuan, an increase of 25% over the same period last year, a net profit of 130 million yuan for shareholders belonging to the parent company, an increase of 94% over the same period last year, and a net profit of 110 million yuan for shareholders of the parent company, an increase of 80% over the same period last year. The analysis is as follows.
Event comment
On the revenue side, under the support of the high boom in the electric vehicle industry, we expect the company to basically maintain the trend of full production and full sales of copper foil, and the overall shipments of 2022Q1 are expected to achieve rapid growth compared with the same period last year.
At the profit end, 2022Q1's gross profit margin was 24%, an increase in 2pct compared with the same period last year, while a month-on-month decline in 1.7pct, which is expected to be mainly due to economies of scale. In terms of expenses, the company's expense rate during the 2022Q1 period reached 11.3%, a year-on-year decline in 2.1pct and a month-on-month decline in 1.0pct. The improvement in expense rate is mainly due to the decline in financial expense rate. Finally, supported by the improvement in profitability, the net profit of the shareholders of the company's 2022Q1 belonging to the parent company increased by 94% compared with the same period last year.
Other financial aspects, the company's 2022Q1 operating cash flow net outflow of 270 million yuan, is expected to be mainly due to the increase in receivables, inventory; 2022Q1 capital expenditure of 180 million yuan, maintaining a high level. In terms of production capacity, the company actively promotes the construction of bases in Qinghai and Huizhou, in which the production capacity of Qinghai copper foil base is 35,000 tons / year, 15,000 tons / year is under construction in 2021, and 15,000 tons / year is under construction; Huizhou copper foil base has a production capacity of 0.8,000 tons / year, and the new production capacity of 120,000 tons / year has been completed and mass production has been started. The company's production capacity is expected to reach 70,000 tons by the end of 2022, which will promote the rapid growth of shipments.
It is estimated that the net profit of the shareholders of the company belonging to the parent company in 2022 is 850 million yuan, corresponding to about 18 times PE. Maintain a "buy" rating.
Risk hint
1. The production and sales of electric vehicles are not as expected.
2. The risk of a rapid decline in copper foil prices.
