The performance was in line with expectations, and the dividend rate remained at a high level of 50%. The company's 2022H1 revenue was 5.23 billion yuan, an increase of 12% over the same period last year, mainly driven by the rise in raw material prices. The company's net profit was 270 million yuan, an increase of 7% over the same period last year, in line with expectations. The company intends to pay an interim dividend of HK $0.139 per share, with a dividend rate of 50 per cent.
The production capacity of aluminum packaging business landed in an orderly manner, and demand gradually recovered in the second half of the year. The revenue of the aluminum packaging business 2022H1 was 2.75 billion, up 28%, of which the revenue of two-piece cans / single-chip cans was 2.65 billion yuan, up 29% and 4% respectively. The increase in revenue is mainly due to the increase in unit prices driven by the rise in the price of raw materials, and the sales side is also expected to maintain a steady increase. In terms of production capacity, the company started its new plant in Shenyang in the first half of the year to fill the northeast production capacity, the new plant in Kunming and the third-line project in Chengdu were carried out in an orderly manner, and the second line of the Belgian plant planned to be put into production this year. Beer demand recovered quickly in August due to high temperature, and we expect demand to resume growth downstream of the two cans in the second half of the year.
Tinplate business downstream demand fluctuations, the future will focus on categories. The company's 2022H1 tinplate packaging revenue was 2.17 billion yuan, down 4% from the same period last year, of which steel drums / milk powder cans / aerosol cans / metal covers / three-piece cans / square cans / painted iron revenues were 7.1kg 3.7pm 2.9pm 1.1pm RMB130 million, year-on-year + 7% Universe 6% Universe 6% Universe 13% Universe 1% Universe 8% RT39% Universe 28%. The decline in revenue from square cans is mainly due to the reduction in downstream business demand such as paint, while the decline in revenue from coated iron is mainly due to the company's priority to protect its own supporting capacity demand. The company will continue to focus on categories, steel drum business, the company has successfully developed Dow Chemical and other international brand customers; in terms of milk powder business, the company will continue to optimize capacity layout in the Northeast. In addition, the company's plastic packaging business revenue in the first half of the year was 310 million yuan, an increase of 8% over the same period last year, and achieved relatively steady growth.
The cost is under short-term pressure and repair is expected to start in the second half of the year. The company's overall gross profit margin of 2022H1 was 11.9%, down from the same period last year. The gross profit margin of the aluminum packaging / tinplate / plastic business was 12.1%, 11.3%, 14.0%, respectively, compared with the same period last year.-1.1/-3.5/-2.7pct, mainly due to the historical high prices of aluminum and tinplate in the first half of the year, the lag of the company's cost transfer, and fluctuations in demand and production capacity under the influence of the epidemic. Raw material prices are expected to fall gradually in the second half of the year, and the company's gross profit margin is expected to improve quarter by quarter.
The company's 2022H1 sales / management expense rate / financial expense rate is 3.8%, 3.8% and 0.7% respectively, year-on-year-0.4/-0.3/-0.0pct, and the per capita efficiency continues to improve.
Valuation and investment advice: we predict that the company's operating income from 2022 to 2024 will be 12 billion yuan, an increase of 13.9%, 4.1%, 5.4%, and a net profit of 4.8 million, 5.3 million, and 27.2%, respectively. Taking into account the liquidity discount of Hong Kong stocks, we give the company a target price of HK $4.50, corresponding to 9 times PE in 2022, maintaining a "buy" rating.
Risk tips: raw material price fluctuation risk, customer demand growth less than expected risk, beer canning rate increase less than expected risk