Introduction to this report:
The company's 202H1 performance is in line with expectations. In the second half of the year, the company's new electronic power and automobile production lines will be gradually put into operation, which will benefit deeply from the development of the industry.
Key points of investment:
Maintain the increase in holdings rating, with a target price of 8.41 yuan. We maintain our previous performance forecasts. We expect the company's EPS for 2022-2024 to be 0.18, 0.29, and 0.39 yuan respectively. Referring to comparable companies, we are given a target market value of 35xPE in 2023 with a target price of 10.15 yuan (+1.74 yuan).
Benefiting from the high prosperity of the polypropylene-based film industry, the company's performance is in line with expectations. In 2022 H1, the company achieved revenue of 519 million yuan, +3.41% year on year. Affected by the decline in inventory prices of household appliance capacitors and connectors, the company's net profit for the first half of the year was 37 million yuan, +25.81% year on year. Excluding the influencing factors of impairment, the company's Q2 net profit was 0.3 billion yuan, +45.72% month-on-month and +178.77% year-on-year, showing a high level of prosperity in the polypropylene substrate film industry. Looking ahead to the second half of the year, the company's previously planned new production lines for power electronics and automotive capacitors will gradually be put into operation, which is expected to contribute to a new increase in performance.
The proportion of high-end products continues to rise, and profitability is expected to reach a new level. Benefiting from strong demand in photovoltaics, automobiles and other industries, the thin-film capacitor market is growing steadily, thereby driving demand for polypropylene-based films. At the same time, films are also developing in the direction of ultra-thin, high temperature resistance, and high voltage resistance, further driving the upward trend in market space. As a leading supplier of polypropylene-based films in China, the current product structure is gradually concentrated on high-end products below 5 μm. At the same time, it is actively developing in the direction of anti-oxidation and water-resistant metallized films adapted to higher humidity and temperature requirements. While downstream demand remains high, the company will also benefit from market development and increased profitability brought about by product structure adjustments.
catalysts. Accelerated commissioning of new production capacity; accelerated release of high-end products
Risk warning. Downstream development falls short of expectations; base film prices fall