Event
The company released its semi-annual report for 2022: 22H1 realized revenue of 3.48 billion yuan, an increase of 31.9% over the same period last year; net profit of 714 million yuan, an increase of 18.2%; and net profit of 660 million yuan, an increase of 14.5% over the same period last year. In 2022, Q2 company realized revenue of 1.75 billion yuan, year-on-year + 28.9%; net profit of 355 million yuan, + 8.3%; and net profit of 304 million yuan, + 0.67% of the same period last year.
Brief comment
Under the influence of the high price of crude oil and PTA and the epidemic situation, H1 still maintained a high profit level in the past 22 years. In the first half of 2022, the company achieved revenue of 3.48 billion yuan, an increase of 31.9% over the same period last year, a net profit of 714 million yuan, an increase of 18.2% over the same period last year, and a net profit of 660 million yuan, an increase of 14.5% over the same period last year. In 2022, Q2 company realized revenue of 1.75 billion yuan, year-on-year + 28.9%; net profit of 355 million yuan, + 8.3%; and net profit of 304 million yuan, + 0.67% of the same period last year. In the first half of the year, due to the expansion of the new material market, the increase in sales orders and the rise in the price of raw materials, the company's revenue and costs increased, and the operating cost reached 2.5 billion yuan, + 43.1% compared with the same period last year. Among the other period expenses, the financial expenses were-687.3% compared with the same period last year, which was mainly due to the increase in exchange earnings in the current period; the change in management expenses was small, + 13.2% compared with the same period last year; the sales expenses were-33.3%, mainly due to the classification of export insurance to operating costs in the current period; the net cash flow of operating activities was 312 million, mainly due to the increase in payment for the purchase of materials; and the R & D expenses were 125 million, + 13.2% compared with the same period last year.
In terms of specific products, the revenue of the optical material film was 1.07 billion yuan, + 22.6% compared with the same period last year, and the gross profit was 30.1%, accounting for 32.8% compared with-8.80 pct last year. The revenue of the new energy material film was 745 million yuan, an increase of 32.4% over the same period last year, and the gross profit was 31.0%, compared with-3.38 pct last year, accounting for 23.5% of the gross profit. The revenue of the variable information material membrane was 225 million yuan, + 30.8% compared with the same period last year, and the gross profit was 48.8%, accounting for 11.2% compared with + 2.35 pct last year. The revenue of the heat-shrinkable material film was 173 million yuan, an increase of 14.5% over the same period last year, and the gross profit was 33.8%, compared with + 1.34 pct last year, accounting for 6.0%. Polyester functional membrane achieved revenue of 815 million yuan, year-on-year-6.68%, gross profit of 18.3%, compared with last year-7.49 pct, gross profit accounted for 15%, the overall product structure continues to be high-end.
In terms of cost gross profit, the company's Q2 net profit decreased slightly compared with Q1 in one quarter. In addition to the demand in consumer electronics and other terminal areas affected by the epidemic, another major factor was the sharp rise in material costs. The average price of Q2 cloth oil in 2022 was 112USD / bbl, 14.6% higher than that of Q1, 58.3% higher than the 21-year average of US $70.80 / bbl, 18.6% higher than Q1's average of 5612 yuan / ton, and 42% higher than the 21-year average price of 4688 yuan / ton. Therefore, in 22 years H1, the company's operating cost was 2.5 billion, year-on-year + 43.1%, the growth rate was higher than the revenue growth, the average gross profit in the first half of the year was 28.1%, which was 5.6 pct; lower than the 33.7 in 2021, of which Q2 gross profit margin was 25.9%, 4.47 pct lower than the 30.4% of Q1. Since the beginning of July, both crude oil and PTA prices have shown a downward trend. Q3 so far, the average price of crude oil is US $103.6 per barrel, the average price of Q2 is-7.5%, the average price of Q2 is 6144 yuan per ton, and the average price of Q2 is-7.7%. As of August 8, the price of Brent crude oil is US $96.65 per barrel, and the price of PTA is 6037 yuan per ton. Compared with the average price of Q2-13.7% and-9.3% respectively.
With the shock and decline of crude oil and PTA prices, the company's cost-side pressure is expected to ease in the second half of the year. At the same time, with the rebound of demand in macroeconomic and terminal consumer electronics areas after the epidemic has been effectively controlled, the company's profit level in the second half of this year and next year will continue to improve compared with the previous year.
Continue to promote industrial research and development and promote new empowerment of science and technology. The company continues to strengthen product research and development in the field of new materials, aiming at high value-added and high-tech products; at the same time, in order to further develop new product lines, we have established specialized R & D teams to promote the company's overall R & D level and technical strength, and enrich the company's product range. In 2022, H1, the company's R & D investment further increased to 125 million, + 13.2% compared with the same period last year, and achieved 12 pieces of new product research and development, of which the construction of 10,000 tons of nano-sized masterbatch was first completed, which solved the problem of neck jam that the masterbatch originally relied on imports. Many new materials, such as PET composite copper foil and new generation reinforced PET, have been submitted for sample evaluation. Photovoltaic backplane is mainly divided into fluorine backplane and non-fluorine backplane two categories, for environmental considerations, fluorine-free backplane structure more in line with the future environmental requirements, the company newly developed samples of enhanced PET substrate, is the ideal material to replace fluorine film, by adding a variety of auxiliary materials to improve the weathering performance of the film, so that enhanced PET substrate effective protection period can be more than 25 years. Copper foil is not only the carrier and current collector of negative electrode material of lithium battery, but also the key material that affects the specific energy and cost of lithium battery. Compared with traditional copper foil, PET copper foil has many advantages, such as low cost, high energy density, high safety, long life and so on. It is expected to replace the large-scale application of traditional copper foil. At the same time, as a high-end new material, the production of PET copper foil has higher technical barriers. The company has developed PET copper foil for many years, and a number of key indicators have been gradually broken through, which is also in the downstream verification stage.
Lithium electricity benefits from the broad application prospect of new energy, and the market space of PET copper foil is expected. Under the double-carbon strategy, China's new energy industry is developing rapidly, and the rapid development of new energy vehicles leads to a high demand for lithium batteries. PET copper foil market has a broad application prospect. According to CITIC Construction Investment New Energy Forecast, in 2022, the global battery installation is expected to reach 900GW. In 2023, the global battery installation is expected to be 1193GW, and the estimated PET copper foil permeability is 3%. The corresponding PET copper foil demand is about 470 million square meters, and the market revenue space is about 3.7 billion yuan. By 2025, the global installed capacity of batteries is expected to reach 2209GW, and if the permeability of PET copper foil increases to 20%, the corresponding demand for PET copper foil is about 5.7 billion square meters, and the market size is about 34.5 billion yuan. The company clamps ahead of time, high-quality track layout PET copper foil, technical advantages and integrated layout of the industrial chain make the company's competitiveness in the field of PET copper foil prominent.
The new production capacity project is progressing steadily, and the company's endogenous growth is strong. Since 2021, the sales volume of the company's four high-end material sectors, namely, optics, new energy, information and thermal shrinkage, has further increased, and the impact of periodic fluctuations in the ordinary polyester film industry on the company's profits will become weaker and weaker. Further stride forward from the traditional ordinary film enterprises to the new high-end film enterprises. The remaining 200000 tons of the company's 500000-ton new production line has been gradually put into production in the first half of 22 years. In addition, from the second half of this year to next year, the company will gradually release new production capacity such as enhanced PET substrates and heat-shrinkable films, and the proportion of high-end functional films in the product structure will further increase. With the expansion of the production capacity of the company's optics, new energy and other high-end thin film products, as well as product upgrading and product structure adjustment, the scale dilution effect is conducive to optimizing costs and further enhancing the company's core competitiveness.
Profit forecast and valuation: taking into account the overall high prices of raw materials this year, as well as the epidemic impact on consumer electronics and other terminal areas of demand, appropriately reduce the 22-year profit forecast to 1.71 billion yuan; at the same time, taking into account the company's PET copper foil accelerated R & D testing, the follow-up product penetration gradually increased, gradually formed a profit contribution to the company, and raised the profit forecast to 4 billion yuan in 2024. It is estimated that the company's net profit in 2022, 2023 and 2024 is 1.71 billion yuan, 2.62 billion yuan and 4 billion yuan respectively, and the EPS is 1.5,2.3,3.50 yuan respectively. The corresponding PE is 17.5x, 11.5x and 7.5x respectively, maintaining the "buy" rating.
Risk tips: project production is not as expected, downstream demand is not as expected, and so on.