The company announced its mid-2022 report that the growth performance was in line with expectations. 2022H1 achieved revenue of 5.227 billion yuan, + 11.7% year-on-year, and net profit of 267 million yuan, + 7.3% compared with the same period last year. 2022H1 received a dividend of 68.64 million yuan from Jiadoubao. Excluding the impact, the return profit was-0.3 per cent year-on-year. The company continues to attach importance to shareholder returns and continues the high dividend policy with an interim dividend of HK13.9 cents, equivalent to RMB 0.12 per share.
Domestic downstream consumption is disturbed by the epidemic, and the company's business resilience reflects the improvement of market share. The income of aluminum / tinplate / plastic packaging of 22H1 company is 27.492169.308 million yuan, which is 7.8% respectively compared with the same period of last year. The company's domestic / foreign market realized revenue of 4.871 million yuan, which was 6.3% higher than that of the same period last year. Domestic downstream consumption was disturbed by the epidemic. 22H1 domestic beer production decreased by 14.4% compared with the same period last year, and beverage production decreased by 1.5% compared with the same period last year. With the advantages of sound layout and operational resilience, the company has further increased its share. The sales volume of aluminum packaging in the business has increased by 2.5%, exceeding the industry level; driven by the cost of raw materials, the company has raised prices to transmit cost pressure, and the average price has increased by 25.3% compared with the same period last year.
With the high operation of raw materials, the gross profit margin is slightly under pressure, and the company improves quality and efficiency to hedge the pressure of raw materials. The gross profit margin of 2022H1 tinplate / aluminum / plastic packaging is 11.3%, 12.1%, 14.0%, respectively, compared with the same period last year-1.1/-3.5/-2.7pct, the overall gross profit margin is 11.9%, year-on-year-2.3pct. The price of 22H1 raw materials is high, and the prices of 2021H1 tinplate / aluminum are + 0.5% and 22.8% respectively compared with the same period last year. Due to the delay in price adjustment, the gross profit margin is under pressure periodically. The company continues to promote internal quality improvement and efficiency work, hedging cost impact: automatically transform product lines, such as electrical conductivity of cans and automatic testing projects of can washing machines, and strengthen information and intelligent exploration to digital simulation development, digital chain attached code and other technologies to promote the development of new products. The company actively promotes the efficiency of internal manpower management, and the per capita sales of 22H1 are + 13.2% compared with the same period last year. The sales / management / financial expense rates of 22H1 are 3.8%, 3.8%, 0.7%,-0.4%, 0.3%, 0.0%, 5.1%,-0.2pct, and ROE9.8%, + 0.3pct, respectively.
The company's two-piece can production can be put into production steadily, grasp the rising trend of industry concentration, and consolidate the leading position. The supply and demand pattern of the two-piece can industry continues to improve. The improvement of beer canning rate, the trend of environmental protection and the upgrading of consumption have driven the growth of demand for two-piece cans. The supply-side excess capacity has been cleared, and the industry pattern has been optimized. CR4 has reached 75%. The company grasps the increasing trend of industry concentration, and the production capacity is put into production steadily. Belgium's second line is expected to be online in October, Kunming project is expected to be put into production by the end of 2022, Shenyang project and Chengdu third line are expected to be put into production in mid-2023. Continue to implement the single-plant two-line and multi-tank strategy, continue to deepen cooperation with core customers such as Coca-Cola Company and Tsing Tao Beer, rely on customer demand close layout and further cover the blank area of production capacity, the total design capacity is expected to reach 17.3 billion cans by the end of 2023 and 18.5 billion cans by the end of 2024, consolidating its leading position.
The pattern of the two-piece can industry continues to optimize, laying the foundation for medium-and long-term profit margin repair, and the company's profitability is expected to pick up further in the second half of the year, benefiting from lower costs and recovery in demand. In the future, the company's two-piece can business will rely on high-quality customer resources to further promote the layout at home and abroad, and continue to benefit from the improvement of bargaining power brought about by industry integration. The three-piece can business was steadily put into production in Weifang, Fujian and other new factories in the second half of the year, with sustained and steady growth. The current PB of Cofco Packaging / Baosteel Packaging / Oruijin / Zexing PE in 2022 is 6X/25X/12X/20X (consistent forecast of Baosteel Packaging, Oruijin and Zexing using Wind), with the lowest horizontal comparison valuation and sufficient safety margin. Maintain the 2022-2024 profit forecast of 5.1G / 58max / 660m, respectively + 10.5% / 12.9% / 14.8% PE / 6X/6X/5X in 2022-2024, and maintain the "Buy" rating.
Risk hint: downstream consumption recovery is not as expected, raw material prices fluctuate.