Event: on the evening of August 30, the company released its 2022 semi-annual report. In the first half of 2022, the company achieved revenue of 2.12 billion yuan, an increase of 73.02% over the same period last year, a net profit of 58.24 million yuan, an increase of 8.09% over the same period last year, and a net profit of 55.42 million yuan, up 10.59% over the same period last year. 2022Q2, the company achieved revenue of 1.176 billion yuan in a single quarter, an increase of 79.73% over the same period last year, an increase of 24.57% over the same period last year, and a net profit of 41.29 million yuan, an increase of 49.67% over the same period last year and 143.59% over the previous year.
Comments:
Phosphorus chemical and modified plastic products significantly increased the revenue of 22H1 company. At present, the company's main business is mainly phosphorus chemical industry, modified plastic particles and modified plastic products. Thanks to the release of production capacity of newly acquired subsidiaries in phosphorus chemical business and the release of light guide plates and other products in modified plastic products, the company's 2022H1 revenue has achieved significant growth. In terms of phosphorus chemical business, the company's traditional phosphorus chemical business is dominated by phosphorus flame retardant products, and 2022H1's flame retardant business has achieved revenue of nearly 100 million yuan, an increase of 21.82% over the same period last year.
At the same time, the company completed the acquisition of Longhua Chemical in the second half of 2021, with an annual polyphosphoric acid production capacity of 26,000 tons / year and phosphorus pentoxide production capacity of 16,000 tons / year. The new polyphosphoric acid and phosphorus pentoxide business brought a revenue increase of 194 million yuan to the company in 2022H1. In terms of modified plastic particles business, 2022H1's modified plastic particles business achieved revenue of 567 million yuan, an increase of about 0.4% over the same period last year. In terms of modified plastic products business, thanks to the increase in breathable film production capacity after the acquisition of Guanzhen Technology and the mass production phase of the company's light guide plate products verified by major customers, 2022H1's modified plastic products business achieved revenue of 712 million yuan, a substantial increase of 146.2% over the same period last year. However, as the price of upstream raw materials is still high, the gross profit margin of the company's products still shows some pressure. 2022H1, the company's gross profit margin is about 12.32%, a decline of 3.62pct compared to the same period in 2021 and a decline of 13.29pct compared to the same period in 2020.
Actively expand the production capacity of phosphorus chemical and modified plastic products, and plan to acquire upstream assets to improve the industrial chain to build phosphorus chemical business. In January 2022, the company added 30 million yuan to Longhua Chemical to promote the expansion of Longhua Chemical phosphorus products. Longhua Chemical is expected to increase the production capacity of 10,000 tons of phosphorus pentoxide and 50,000 tons of polyphosphoric acid in the second half of 2022. In addition, during the reporting period, the company also completed the research and development and pilot test of engineering plastic flame retardants and low-cost flame retardants that can be used in electronic appliances. It is expected that 2022H2 will have a number of new flame retardant products to be put into mass production one after another. In terms of modified plastic particle business, 2022H1 raised and invested a project to increase the production capacity of modified plastic particles by 30, 000 tons per year, and the company's subsidiary in Wuhu, Anhui Province, increased the production capacity of modified plastic particles by more than 10, 000 tons / year. At the same time, the company is also actively investing in the R & D and production of plastic recycling such as PC and PP, and it is expected that 2022H2 will increase the production capacity of PC recycling materials by 20,000 tons per year. In terms of modified plastic products business, the company will continue to expand the light guide plate production capacity, and it is expected that the company's light guide plate production capacity will increase from 6000 tons / year to 24,000 tons / year by 2023. Furthermore, in order to better serve overseas customers, the company has built a related sanitary products production line in Nigeria, and the follow-up company will relocate part of its breathable membrane production capacity to Africa, thus opening up the sanitary products industry chain in Africa.
On August 19, the company announced that it planned to participate in the public recruitment of investors in the bankruptcy restructuring of Anhui Haide Chemical Technology Co., Ltd. Haide Chemical is mainly engaged in isooctane and MTBE and other chemical products, its business scope includes 124,000 tons / year low olefin LPG, 80,000 tons / year aromatic oil, 1358000 tons / year MTBE, 1607000 tons / year industrial isooctane and other products. The company's acquisition of Hyde Chemical will effectively reduce the risk of raw material price fluctuations, improve the layout of the company's industrial chain, cooperate with the company's self-construction projects and deepen the industrial structure. At present, the company has dabbled in the upstream petrochemical end of the business, 2022H1 company's new LPG commissioned processing business achieved revenue of 215 million yuan.
In the short term, the company will entrust Hyde Chemical to carry out processing, and the follow-up will launch a 160000-ton isooctane project with Hyde Chemical as the main work.
Implement the restricted stock incentive plan and bind the interests of the company's core members on August 16, the company issued the 2022 restricted stock incentive plan (draft). The company intends to grant no more than 2.05 million restricted shares to 29 incentive targets, of which 1.64 million shares will be awarded for the first time at a price of 14 yuan per share. The 29 incentive targets include company directors, senior managers, core technical personnel and middle managers. The incentive plan takes the company's net profit or operating income from 2022 to 2024 as the assessment index (as long as any index can be met in the corresponding year), of which the net profit assessment targets for 2022-2024 are 1.50pm 208pm 288 million yuan respectively, and the revenue assessment targets for 2022-2024 are 40max 52 / 6.76 billion yuan respectively. This incentive plan effectively binds the interests of the core members of the company, and is expected to further stimulate the working motivation of the core members of the company and jointly promote the quality development of the company in the future.
Profit forecast, valuation and rating: 2022H1 achieved significant revenue growth thanks to the company's volume of phosphorus chemicals and modified plastics products. However, as the price of upstream raw materials is still high, the company's product profitability is still under pressure, resulting in lower-than-expected 2022H1 profits. Considering that the gross profit margin of the company's products has not recovered significantly for the time being, we have lowered the company's profit forecast for 2022-2023 and added the 2024 profit forecast. It is estimated that the 2022-2024 net profit of the company will be 1.52 (down 38.7%) / 2.11 (down 41.7%) / 295 million yuan respectively. The company is actively and continuously expanding the production capacity of phosphorus chemicals and modified plastics related businesses, and is expected to reduce the negative impact of raw material price fluctuations through the layout of upstream business and related assets. we are still optimistic about the company's long-term development and maintain its "buy" rating.
Risk tips: product and raw material price fluctuations, lower-than-expected demand, capacity construction risk, new business promotion risk.
