Event: 1) the company released the 2021 report, with revenue of 4.115 billion yuan, year-on-year + 77.18%, net profit of 824 million yuan, + 109.67%, and non-return net profit of 818 million yuan, + 114.12% compared with the same period last year, all reaching the highest level since listing, mainly due to the rise in the sales price of the main products. Revenue in the fourth quarter was 1.047 billion yuan, year-on-year + 35.71%, month-on-month-2.79%, return to the mother net profit of 200 million yuan, + 22.53%, month-on-month + 2.28%. 2) release the quarterly report for 2022, achieving revenue of 890 million yuan, year-on-year-3.86%, net profit of 129 million yuan, year-on-year-36.89%, deducting non-return net profit of 128 million yuan, year-on-year-36.83%, net interest rate 14.27%, month-on-month-5.77 pct. 3) issue a profit distribution plan and pay a cash dividend of 4.2 yuan for every 10 shares. The company's performance is in line with expectations.
The quantity and price of flame retardants have risen into a high boom, and the production capacity of paint auxiliaries has been released. 1) Flame retardants: driven by the EU's halogenation-free policy and the demand of downstream new energy vehicles, the sales price of flame retardants has risen and entered a high boom. In 2021, the company sold 127600 tons of flame retardants, an increase of 33.13% over the same period last year, with a gross profit margin of 37.19% and + 2.76 pct, of which 29700 tons were sold in the fourth quarter, + 3.51% compared with the same period last year; the average sales price reached 29617 yuan / ton, + 43.47% over the same period last year. 2) Amine promoters and catalysts: the company sold 24900 tons of amine promoters and catalysts in 2021, year-on-year + 4.03%, gross profit margin 16.69%, year-on-year-5.04 pct, of which the fourth quarter sales of 5300 tons, year-on-year-28.41%, month-on-month-20.17%; the average sales price was 23189 yuan / ton, + 9.10% year-on-year 3) paint auxiliaries: affected by the development of production energy release overlay market sales, the company sold 9700 tons of paint auxiliaries in 2021, + 97.26% year-on-year, gross profit margin 10.83%, year-on-year + 8.67 pct, of which the fourth quarter sales of 2500 tons, year-on-year + 2.80%, month-on-month + 0.68%, the average sales price was 16948 yuan / ton, + 40.99%.
The construction project is carried out as scheduled, and the production capacity expansion is at a good pace. Dawei Phase II technical renovation project with an annual output of 27000 tons has completed the on-site installation and is expected to be put into trial production in the second quarter of this year. Shandong Wansheng base annual output of 319300 tons of functional new materials project has achieved environmental assessment, energy assessment and started construction, laying the foundation for the company to extend the layout of the industrial chain.
Add 2024 profit forecasts, adjust 2022 and 2023 profit forecasts, and maintain the "buy" rating. We estimate that the company's operating income from 2022 to 2024 will be RMB 5.667 trillion, respectively, and its net profit will be RMB 683 million, corresponding to 14X/10X/8X, and the target market capitalization for next year will be RMB 14.621 billion, corresponding to 15 times PE in 2023, with a "buy" rating.
Risk tips: raw material price fluctuation risk, exchange rate fluctuation risk, safety and environmental protection risk
