Summary:
1. The company is a high-tech enterprise focusing on the research and development, production and sales of polylactic acid, mastering the complete "two-step" process and breaking the foreign technical monopoly of lactide "neck". Control the core technology of the key links of pure polylactic acid manufacturing and compound modification, realize the large-scale production of polylactic acid multi-brand, multi-purpose and unidirectional customization, and realize the complete localization of polylactic acid industry chain. From the perspective of actual demand, under the support of plastic restrictions and ban laws and regulations of various countries and regions, the actual global demand for degradable plastics keeps growing, which can bring about a large-scale demand for polylactic acid.
2. The company's core competitiveness is reflected in: the company independently developed lactide technology, achieved mass production, and completely got rid of the import dependence of lactide; the company focused on the research and development of polylactic acid (PLA). It has formed more than 10 major brands and more than 30 subdivided polylactic acid brands, fully covering all aspects of downstream customers' requirements for polylactic acid. The company is in the forefront of the domestic polylactic acid industry, the development time is relatively long, the related technology reserve is rich, and it has obvious technical advantages, quality advantages and first-mover advantages in the industry, which is conducive to the long-term development of the company. Through years of deep ploughing in the industry, the quality of the company's products has become the benchmark of the domestic market and reached the same level as foreign leading enterprises. The company's products have obtained FDA food contact safety certification in the United States, compliance certification in Japan, REACH registration in the European Union, and compostable certification in Australia, Germany, the United States and Austria.
3. The funds raised by the company's A-share issue will all be applied to the projects related to the company's main business and the working capital needed for the development of the main business, including the "annual output of 150000 tons of polylactic acid project" and "R & D center construction project". If it can be put into production smoothly, it will greatly improve the production capacity of the company's products, expand the scale of production and operation, and then effectively meet the growing market demand and increase the market share of the company's products.
4. Benefiting from the gradual commissioning of the company's projects and the strong downstream demand for the company's products, we expect the company's operating income to grow by 67.9%, 28.8% and 45.7% from 2022 to 2024, and the home net profit growth rate is 95.5%, 69.7% and 44.6%.
5. The discounted cash flow valuation of PE valuation is used to analyze the valuation of the company. in terms of relative valuation method, it is estimated that the reasonable market value of the total equity of the company is 31.96-3.604 billion yuan. In terms of discounted cash flow, the total equity value of the company is estimated to be 3.415 billion yuan. Combining the two valuation methods, the overall fair value range of the company from June to December after the issuance of IPO is 31.96-3.604 billion yuan, corresponding to 47-53 times of the 2022 forecast return net profit, 90.62-102.18 times of the company's non-post-return net profit in 2021, and 94.7-106.79 times of the company's non-post-return net profit in 2021. As of July 22, 2022, the company's industry had a static PE valuation of 11.6 times over the past month. Based on the total share capital of 203 million shares after the issue, the price per share is expected to be 15.77-17.78 yuan per share.
6. Risk hints: (1) the impact on the company's earnings if the earnings forecast hypothesis is not established; (2) the risk that the valuation is higher than the industry and comparable companies' price-to-earnings ratio; (3) technical risk:
The risk of core technology leakage, the risk of technology development lagging behind, etc.
(4) operational risks: major suppliers focus on related risks, risks of rising raw material prices or failure to supply in time; (5) internal control risks: the risk of lack of management experience and the risk that the internal control system cannot be effectively implemented; (6) financial risks: the risk of gross profit margin decline, the risk of exchange rate fluctuations, etc.; (7) legal risks: intellectual property dispute risk, potential product quality dispute or litigation risk.
Investors should make their own investment decisions and bear their own investment risks.
