Event: the company released its mid-2022 report that 2022H1 achieved 311 million yuan in operating income, an increase of 1.51% over the same period last year, and a net profit of 50.5878 million yuan, down 29.83% from the same period last year. Earnings per share were 0.72 yuan, down 39.85% from the same period last year, and the amount of operating cash flow was-25.3458 million yuan, down 154.74% from the same period last year.
The price of raw materials is rising and the gross profit margin is under pressure. 2022H1, the overall gross profit margin of the company's business was 23.68%, down from the same period last year. In terms of business, the gross profit margin of colored optoelectronic base film / transparent film / other functional film was 31.58%, 11.90% and 14.41% respectively, down 10.90%, 18.14% and 17.45% respectively compared with the same period last year. We believe that the main reason for the pressure on gross profit margin is the rising price of raw materials. The main raw materials of the company's products are polyester chips, which are affected by the price of crude oil. The spot price of 2022H1, West Texas Intermediate Light crude (WTI) rose 39.01% compared with the beginning of the year, and the CCFEI price index of polyester chips rose 21.88% compared with the beginning of the year. The cost of raw materials accounts for more than 50% of the main business costs of the company's own products, and the sharp rise in raw material prices puts pressure on the company's performance in the short term. The decline in raw material prices after July is expected to reduce the pressure on the company's cost end. In line with the company's inventory adjustment, fine production and other cost control measures, and the company's main products non-ferrous photoelectric substrate film has a high market irreplaceability We believe that the company's performance in the second half of the year is expected to be repaired.
The new production capacity is in progress, and the production capacity has increased by 174% after it was put into production. The company currently has a production capacity of 42000 tons and is under construction of 73000 tons, of which the company uses its own funds to build a new production capacity of 35000 tons and uses IPO to raise funds to plan a production capacity of 38000 tons, specifically with an annual production capacity of 18000 tons of functional polyester film (including colored optoelectronic base film, transparent film and other functional films) and an annual output of 20,000 tons of optical film base film. The self-built project is expected to be put into production in 2023, and the fund-raising project is expected to be partially put into production in 2022 and all in 2024, when the company's polyester film production capacity will increase from 42,000 tons / year to 115,000 tons / year, an increase of 174%. The high production capacity is expected to lead to the release of the company's performance.
The scope of functional film business continues to expand, the layout of optical film substrate film to create long-term competition barriers. The company's functional film products have been extended to the fields of solar backpanel film, flame retardant film and core film. Solar backpanel base film is the core part of solar cell backboard, which protects and supports silicon cell with excellent performance. the flame retardant film has been initially popularized. In addition, the company plans to use fund-raising funds to build an optical film base film production line and R & D center with an annual output of 20,000 tons, including optical grade base film for optical polarizer, optical grade touch screen (ITO) protective film base film, and backlight module brightening base film. At present, the existing production line has been used for small-scale trial production and sent to the intended customer for testing. Optical film base film is one of the products with the highest technical threshold in the field of polyester film, and the company is expected to create a long-term moat by constantly tamping high-tech product research and development.
Investment suggestion and valuation: as the leader of the domestic non-ferrous optoelectronic substrate film industry, the products have a certain market uniqueness, and the performance is under pressure to a certain extent with the rise of raw material prices in the short term, and in the long run, we believe that as the company is building production capacity in the next three years, coupled with higher technical barriers products are expected to be put into production smoothly, with performance flexibility.
We estimate that the company's sales revenue from 2022 to 2024 will be 665 million yuan, 900 million yuan and 1.197 billion yuan respectively, with a growth rate of 3.98%, 35.28% and 32.98%, respectively. The net profit of homing was 137 million yuan, 197 million yuan and 261 million yuan respectively, with a growth rate of 10.6%, 44.09% and 32.18%, respectively. The corresponding PE were 23.05X, 16.00X and 12.10X, respectively. Maintain the investment rating of increasing holdings.
Risk tips: upstream raw material fluctuation risk, intensified market competition, new production capacity digestion risk, product research and development is not as expected, COVID-19 epidemic repeated risk.