Event: on August 9, 2022, double Star New Materials released the 2022 mid-term report that the company achieved revenue of 3.483 billion yuan in 1H in 2022, an increase of 31.88% over the same period last year, and a net profit of 714 million yuan, an increase of 18.21% over the same period last year.
The external environment is unfavorable under short-term pressure, and the results in the first half of the year showed resilience. The company Q2 realized revenue of 1.753 billion yuan, year-on-year + 28.94%, month-on-month + 1.33%; net profit returned to the mother was 355 million yuan, + 8.27% year-on-year,-1.26%. In the first half of the year, due to repeated domestic epidemics, the company suspended production for about half a month, and logistics and transportation were also affected to a certain extent. The high price of crude oil, PTA and other upstream raw materials caused high costs. The company's operating costs significantly rose to 2.503 billion, an increase of 43.04% over the same period last year, and gross profit margin decreased by 5.61pct to 28.12%. The company's performance in the first half of the year showed strong resilience. With the decline in the price of upstream raw materials and the release of the company's high gross margin products, it is expected that the future gross profit and profit level will continue to improve.
The "five major plates" continue to make efforts, and the proportion of new materials is rising. The company attaches importance to research and development and accelerates the development of five new material plates: optical materials, new energy materials, information materials, heat shrinkable materials and energy-saving window film materials. The R & D expenditure in the first half of 22 was 125 million yuan, an increase of 13.34 percent over the same period last year. The proportion of new materials in main business revenue increased to 73% from 67% in the same period last year, and the profit share increased from 75% to 83%. The company's main force of new materials, optical film, achieved revenue of 1.068 billion yuan in the first half of the year, an increase of 22.61% over the same period last year, and the planned annual revenue accounted for 45%, of which the new products developed for Samsung were substituted for Korean film enterprises. Benefiting from the high demeanor of photovoltaic, new energy materials were in short supply in the first half of the year, with revenue of 745 million yuan, an increase of 32.37% over the same period last year, and new production lines are expected to expand in the second half of the year. The company's variable information material film is Longyi in the world, and the heat-shrinkable film is promoting the full replacement of PETG to PVC. The two major plates achieved revenue of 2.25 yuan and 174 million yuan respectively in the first half of the year, and the future development space is worth looking forward to.
Looking forward to the layout of PET copper foil, new growth points can be expected in the future. At present, the market size of lithium copper foil is more than 50 billion yuan. PET copper foil has the advantages of high safety, low cost and high energy density. It is expected to partially replace the traditional copper foil in the negative electrode of battery in the future. The market capacity of PET copper foil is expected to reach 100-15 billion yuan in 2025.
The company has achieved full coverage of the key links of the PET copper foil "base film-magnetron sputtering-water plating" two-step process, and has obvious advantages as a platform company. The company established a project of PET copper foil as early as 2020, and then conquered the raw material ratio and achieved mass production of 4.5 μ m base film. in the copper coating link, its magnetron sputtering equipment was purchased from Applied Materials Inc, and the water plating equipment and technical reserves are perfect. Compared with outsourced PET base film companies, self-developed base membrane can effectively reduce costs, the current double star production of PET base membrane price less than 30,000 yuan, only half of the international leader Dongli, in the PET copper foil production has a significant cost advantage.
The company's PET base film has been supplied externally, and PET copper foil samples were sent for testing last year, and the current progress is smooth. The company will improve the formula according to the feedback, optimize the ductility and oxidation resistance, and will mass produce according to the customer's follow-up feedback in the future, which is expected to open a new growth curve for the company in the field of new energy.
Investment suggestion: double Star New Materials and New Materials business continues to expand, PET copper foil layout is comprehensive, the performance is tough under the adverse external environment, which fully reflects the competitiveness of the company. We expect the company's annual return net profit in 22-23-24 to be RMB 17.07 billion, respectively, corresponding to the PE of 16-11-8. Taking into account the future decline in raw material prices in the upper reaches, the relief of the epidemic, and the continued expansion of capacity in major sectors after the company's new production line, the company is expected to accelerate revenue and profit growth, covering it for the first time and giving it a "recommended" rating.
Risk tips: upstream raw material price fluctuations; product development is not as expected; downstream demand is not as expected.