occurrences
1. Recently, the company released its 2022 mid-year report, which achieved a total revenue of 363 million yuan in the first half of the year, an increase of 21% over the previous year; Guimu's net profit was 83 million yuan, an increase of 42% over the previous year. Among them, second-quarter revenue was 162 million yuan, down 7% year on year, and Guimu's net profit was 26 million yuan, down 37% year on year.
2. The “Xenon Single Batch Purchase Contract” was signed recently, with a total contract amount of 48 million yuan.
The impact of factors such as the epidemic and factory maintenance has abated, and carbon dioxide profits in the second half of the year are expected to restore the current carbon dioxide production capacity of 560,000 tons, an increase of 22% over the end of last year. Production capacity is expected to increase further after the Jieyang project is put into operation. Affected by factors such as the epidemic and routine factory maintenance, the company's carbon dioxide sales revenue in the first half of 2022 was 110 million yuan, down 19% from the previous year, and gross margin was 47%, down 7 pct from the same period last year. It is expected that gross margin will gradually rise as the proportion of high-end food customers and dry ice products increases.
The net profit of electronic specialty gases in the first half of the year reached 42%; the execution of the Changxie price lock contract and the continuous increase in orders benefited from a sharp rise in the volume and price of rare gases. The sales revenue of special gases in the first half of 2022 was 65.85 million yuan, a sharp increase of seven times over the previous year. Yueyang Electronic Special Gas Company achieved net profit of 34.47 million yuan, accounting for 42% of net profit.
Order amounts of 1938/4,500/21 million yuan were signed for rare gases in 2021/2021/2022/2022, respectively. Recently, a long-term price lock purchase contract for xenon was signed, amounting to 48 million yuan, which is expected to form an important support for the third quarter results. The total order amount in 2022 reached 114.08 million yuan, a significant increase over last year.
An equity incentive plan for 2022 has been released, with broad coverage demonstrating management's confidence that no more than 19 million restricted shares will be granted at an award price of $8.24. The performance assessment target of the incentive plan is that the net profit for 2022/2023/2024 is greater than 1.8/25/350 million yuan, respectively.
It is proposed to raise no more than 1 billion yuan to implement two projects, including special gas and high-clean hydrogen peroxide, and the company plans to raise no more than 1 billion yuan for the implementation of two projects, including Yizhang Kaimete Special Gas and Fujian Kaimete, which produces 300,000 tons of high-clean hydrogen peroxide per year.
Electronic specialty gases have created a new growth pole: rare gases are expected to be released, officially entering synthetic products1) Rare gas sales were steady in 2021, relevant certifications were obtained, and sales contracts for rare gases (krypton, xenon, neon) were signed for a total amount of 19.38 million yuan. The amount of rare gases is expected to be released in 2022.
2) It is proposed to establish Yizhang Kaimei Special Gas Co., Ltd. to officially enter synthetic gases. The products include halogen gas, VOC standard gas, deuterium gas and other products. The total project investment is 750 million yuan. The project construction period is 3 years. The estimated annual income after delivery is 650 million yuan, tax payments of 100 million yuan, and the internal rate of return is as high as 28%.
Profit forecasts and investment advice
The company's net profit for 2022-2024 is expected to be 2.5/41/540 million yuan respectively, with a compound growth rate of 57%. The corresponding PE is 46/28/21 times respectively, maintaining the “buy” rating.
Risk warning: Project commissioning progress fell short of expectations, and electronic specialty gas sales fell short of expectations.