Event: on August 26, 2022, the company released its semi-annual report of 2022. In the first half of the year, the company realized operating income of 916 million yuan, + 48.46% compared with the same period last year; realized net profit of 94 million yuan, + 70.40%; and deducted non-net profit of 92 million yuan, + 136.55% over the same period last year. From a quarterly point of view, the company Q2 achieved revenue of 533 million yuan in a single quarter, + 54.82% year-on-year, + 38.99% month-on-month, and net profit of 61 million yuan, 99.95% and + 82.04%, respectively. The reasons for the substantial improvement in the company's performance are as follows: 1) the adjustment of production and marketing structure and the increase in the proportion of BO backplane with better profitability. 2) the production capacity of aluminum-plastic film business is gradually released.
Backplane: fluorine-free backplane continues to open up important customers, which is expected to bring volume and profit. As the price of PVDF film continues to rise and the cost of K-series backplane remains high, the company set the operating target of BO fluorine-free backplane production and sales accounting for 60% at the beginning of the year. The company's H1 backplane sales volume reached 58.8477 million square meters, with a production and sales rate of 103%, of which BO backplane sales reached 4140.19 square meters, which was + 227.57% compared with the same period last year, accounting for more than 70%. To achieve the target set at the beginning of the year, BO backplane sales reached 404 million yuan, accounting for 62.01% of backplane revenue. According to the company's plan, the current BO backplane continues to promote the introduction of head customers, with the accelerated release of fund-raising projects, it is expected to achieve both volume and profit.
Plastic film: the production capacity is expanding steadily and is expected to provide new increments. In terms of production capacity, the company's 120 million square meter POE film project is under construction. At present, four production lines have been successfully put into production, with an annual production capacity of 4000 million square meters.
In terms of shipments, H1 company sold 9.22 million square meters of film, which was + 171% last year, and the production and sales rate reached 93%.
At the same time, the company's two POE/EVA film production lines have been installed, in the capacity expansion at the same time to meet the diversified needs of customers. In terms of customer introduction, at present, the company's main customers are Jing O Technology, Oriental Risheng and other head assembly factories, in the second half of the year will be committed to Longji batch introduction and Tianhe, Hanhua and other customer certification, as the new battery technology continues to release, the company in terms of raw materials closely supporting Dow, LG chemistry, POE film products are expected to benefit from this trend, accelerate the volume.
Aluminum-plastic film: take advantage of the domestic Dongfeng, aluminum-plastic film business to accelerate the attack. Previously, the aluminum-plastic film market was mainly in Japan and South Korea. In recent years, with the slowdown of overseas manufacturers' production expansion and the rise of domestic soft-package batteries, the process of localization of aluminum-plastic film has been accelerated. In the first half of 2022, the company's 1000 million square meter lithium battery aluminum-plastic film expansion project was completed and put into production. In terms of shipments, the shipment of aluminum and plastic film reached 347.7 million square meters in the first half of the year, + 46% year on year, and the production and sales rate reached 94.5%. In terms of customers, the company's existing customers such as Paron Technology, Ganfeng Battery and Penghui Energy are all in the stage of production expansion, while leading customers such as BYD and ATL are being introduced. It is estimated that the production and sales of aluminum and plastic film will exceed 1000 square meters in 2022.
Investment suggestion: we estimate that the company's revenue in 22-24 will be 2.348 million yuan, 4643 million yuan, and its net profit will be 2.28 million yuan, 510 million yuan, 783 million yuan respectively, with a growth rate of 86%, 124% and 54%, respectively. Share price corresponds to PE multiple 49x/22x/14x on August 29th. The company spans the two high-prosperity tracks of photovoltaic and Xinneng cars, the photovoltaic packaging business is growing steadily, and the aluminum-plastic film business fully benefits from the wave of domestic substitution, the performance may usher in rapid growth and maintain the "recommended" rating.
Risk hints: lower-than-expected demand and fluctuations in raw material prices