Events:
According to the company's semi-annual report for 2022, the company's revenue in the first half of the year was 625 million yuan, down 8.87% from the same period last year, and its net profit was 63 million yuan, an increase of 6.18% over the same period last year. The overall performance was slightly lower than expected, mainly affected by the decline in household membranes.
Main points of investment:
Household membrane is affected by the decline of water purifier in the first half of the year, and the new version of the national standard of water purifier in the second half of the year is expected to optimize the competition pattern. Affected by the COVID-19 epidemic in the first half of the year, the sales of downstream water purifier manufacturers declined, and the household membrane market was greatly impacted. At the same time, the new version of "Water efficiency limits and Water efficiency grades of Water purifiers" will be implemented in July 2022, and the improvement of water efficiency standards will promote household membrane demand to the direction of high performance and high water saving.
Domestic brand recognition continues to improve, industrial membrane import substitution continues to promote. Domestic reverse osmosis membrane manufacturing technology is becoming more and more mature, domestic brand recognition continues to improve, and the company promotes product technology renewal and iteration by strengthening research and development. Continuous breakthroughs have been achieved in the market segments of special material concentration and separation membranes, high-performance seawater desalination membranes, strong acid and alkali resistant membranes, and promote the localization of high-performance membrane materials. At the same time, the company's overseas industrial projects have increased, and the domestic industrial film brands with good stability and high performance represented by the company have been further recognized by the market.
Driven by industrial film, the revenue of membrane products in the first half of the year was 372 million yuan, an increase of 1% over the same period last year, and the gross profit margin was relatively stable. In the first half of the year, affected by the COVID-19 epidemic, the growth of the national economy further slowed down, regional transportation was blocked, industrial investment was delayed, and sales activities were restricted to varying degrees. In this context, the company adopts the three main lines of research and development, supply chain and market to increase the market development of industrial film direct sales, and the revenue of membrane products increased by 1% in the first half of the year compared with the same period last year. In terms of gross profit margin, the company implemented the annual supply chain management strategy and flexibly responded to logistics restrictions and rising raw material prices. Gross profit margin was 38.89%, down 2.45 pct from the same period last year, which is relatively stable as a whole.
Membrane separation is no longer affected by green environmental protection, and the reclaimed water reuse project is in stable operation. The company's Tianjin reclaimed water reuse project has a stable operation, with a revenue of 26.6209 million yuan in the first half of the year, an increase of 10% over the same period last year. Membrane separation business due to green environmental protection is no longer included in the scope of the company's consolidated statements, membrane separation business revenue decreased by 100%.
Plant fiber affected by the epidemic situation, there is a certain decline. The company's holding subsidiary Natural Science and Technology (56.44%) is mainly engaged in plant fiber business. In the first half of the year, the willingness to consume furniture terminal declined, the competition in the superimposed market was fierce and the raw materials rose. The income of Natural Science and Technology was 204 million yuan, down 2.62% from the same period last year. The net profit was 7.45 million yuan, down 24% from the same period last year.
Profit forecast and rating: taking into account the acceleration of import substitution of industrial film, we maintain the company's 2022-24 net profit of 1.54 million, 1.91 million, and the current share price is valued at 28-23-18 times the PE valuation, maintaining a "buy" rating.
Risk hint: the progress of import substitution is not as expected; the release of orders from emerging markets such as salt lake lithium extraction is not as expected.
