The company announced its 2021 full-year results, with revenue of 1,832 million yuan, up 79.2% year on year; net profit attributable to parent of 210 million yuan, up 161.2% year on year; net profit attributable to shareholders of the parent company after deducting 115 million yuan, up 159.6% year on year; non-current profit and loss, mainly measured in fair value, and financial assets with changes included in current profit and loss reached 103 million yuan. The company plans to distribute a cash dividend of 1.00 yuan (tax included) for every 10 shares to all shareholders, send 0 bonus shares (tax included), and transfer 7 shares for every 10 shares to all shareholders using the Capital Provident Fund.
The company announced its results for the first quarter of 2022. Revenue for the first quarter was 451 million yuan, up 11.9% year on year and 13.9% month on month; net profit attributable to shareholders of the parent company was 32 million yuan, up 38.8% year on year, and down 10.9% month on month. The gross sales margin for the first quarter was 21.3%, an increase of 2.7 pcts over the previous year.
Key points to support ratings
The volume and price of major products have risen sharply. By business, the company's ultra-clean high-purity reagent business achieved revenue of 330 million yuan in 2021, up 58.7% year on year; sales volume was 5,2073 tons, up 25.9% year on year; average sales price was 6,373 yuan/ton, up 26.0% year on year; and gross margin was 17.4%, up 0.2 pcts year on year.
The company's photoresist and supporting reagents business achieved annual revenue of 270 million yuan, up 53.0% year on year; sales volume was 11175 tons, up 48% year on year; average sales price was 24,530 yuan/ton, up 3.4% year on year; gross margin was 43.5%, up 4.3 pcts year on year. The company's lithium battery materials business achieved annual revenue of 580 million yuan, up 69.3% year on year; sales volume was 22,321 tons, up 24.9% year on year; average sales price was 26,120 yuan/ton, up 35.5% year on year; gross margin was 16.7%, down 1.9 pcts year on year. The gross margin of the company's lithium battery materials business improved month-on-month in the second half of the year, and the volume and price of major products rose sharply.
Production capacity for semiconductors and lithium battery materials has been steadily increasing. During the reporting period, the first phase of the company's 30,000-ton semiconductor-grade high-purity sulfuric acid production line was successfully opened to traffic. The product is undergoing intensive cross-line testing among mainstream customers, and has already been sold to customers such as Hefei Jinghe. At the same time, the semiconductor-grade high-purity sulfuric acid phase II 60,000 ton project is under active construction and is expected to be completed in the first half of 2023. The resolution of KrF (248nm deep ultraviolet) photoresist products has reached the technical requirements of 0.25 to 0.13 μm. It has passed tests by some important customers. A mass production line for KrF photoresist is under active construction, and it is planned to form batch supply in 2022. The key electronic materials project for integrated circuits with an annual output of 1,200 tons is under construction. The estimated construction period is 1 year. The 50,000-ton NMP production expansion project is in the early stages of construction preparations.
valuations
Considering that the impact of major non-recurring profit and loss projects is not sustainable, production expansion projects are still to be released. Profit forecasts have been lowered. Earnings per share for 2022-2024 are expected to be 0.59 yuan, 0.88 yuan, and 1.20 yuan, respectively, with corresponding PE being 40.5 times, 26.9 times, and 19.9 times, respectively. I am optimistic that the volume and price of the company's semiconductor materials and lithium battery materials will continue to increase. In the context of domestic substitution, demand may recover after the pandemic, and purchase ratings will still be maintained.
The main risks faced by ratings
Project commissioning fell short of expectations; photoresist R&D promotion process was blocked; repeated epidemics, etc.
