Event: the company reported that 1H22 realized income of 1.966 billion yuan, an increase of 5.6% over the same period last year, and realized net profit of 241 million yuan, down 48.6% from the same period last year, deducting 234 million yuan of non-return net profit, down 49.2% from the same period last year. The company's single Q2 realized income of 919 million yuan, an increase of 3.2% over the same period last year, and realized a net profit of 120 million yuan, down 46.3% from the same period last year, deducting 117 million yuan from non-parent net profit, down 46.3% from the same period last year.
Comments:
The main packaging industry has grown steadily, and the layout of new materials business has been accelerated. The company's 1H22 achieved an income of 1.966 billion yuan, an increase of 5.6% over the same period last year, and a single Q2 realized revenue of 919 million yuan, an increase of 3.2% over the same period last year. During the period, the company continued to consolidate the main business foundation of packaging printing with the strategic direction of "increasing cigarette label, expanding drug packages, and adding races". And continue to increase investment in Class I pharmaceutical packaging and new materials.
From the perspective of business, 1) cigarette label business: 1H22 achieved revenue of 1.347 billion yuan, an increase of 9.65% over the same period last year, and sales volume of 175.79 cases during the period, an increase of 6.03% over the same period last year; in the first half of the year, the company participated in 32 project bids initiated by 7 tobacco customers, relying on good enterprise qualifications, production management service capabilities and cost control advantages, the company won a total of 18 projects In July 2022, the technical renovation and relocation project of Hunan Furui High-end Packaging and Printing Intelligent Factory started. After the completion of the project, it will effectively radiate customers in the surrounding area and promote the sustainable development of the company's printing and packaging business in the next stage. 2) Pharmaceutical packaging business: the revenue in the first half of the year was 278 million yuan, an increase of 7.21% over the same period last year; during the period, the company continued to expand the construction of the drug bag industry; at the same time, customers at home and abroad continued to optimize the customer structure of the drug packaging business section driven by expansion. 3) New materials business: the income in the first half of the year was 137 million yuan,-0.69% compared with the same period last year; in terms of new energy materials, the Bosheng new materials invested by the company during the period was in good condition, and the Hunan production base was basically full production. The Jiangsu Yancheng production base has also entered the trial production stage, and the production capacity will be further increased after it is formally put into production, and will be arranged to expand production in the future according to the order situation. In terms of functional membrane materials, the company announced in July 2022 that the subsidiary company intends to invest 130 million yuan (tentatively) in the construction of new functional membrane materials to help the company form a core product system of recyclable high barrier materials and enhance its comprehensive competitiveness.
During the period, the expenses are continuously optimized, and the high base of investment income affects the net profit. 1) Gross profit margin: 1H22 Company achieves gross profit margin of 31.75%, year-on-year-1.8pct; single Q2 achieves gross profit margin of 31.28%, year-on-year-2.0pct. 2) period expenses: the rates of sales, management, R & D and financial expenses of 1H22 Company are 3.8%, 7.0%, 4.4% and-0.4%, respectively, with year-on-year changes of-0.7pct,-1.0pct, + 0.3pct,-0.6pct, and the overall improvement trend during the period. 3) net profit: 1H22 realized net profit of 241 million yuan, down 48.6% from the same period last year, deducting non-return net profit of 234 million yuan, down 49.2% from the same period last year; single Q2 realized net profit of 120 million yuan, down 46.3% from the same period last year The large change in net profit is mainly due to the investment loss of 48.48 million yuan in the first half of the company's consumer investment fund business, compared with 290 million yuan in the same period last year. The company's consumer fund covers major new consumer brands. Among them, Nai Xue's tea has been listed on the Stock Exchange of Hong Kong, and Baiguo Orchard has submitted a prospectus to the Stock Exchange of Hong Kong on May 2, 2022. Many projects are showing a stable and good development trend. 4) Operation: 1H22 realized cash flow of operating activities of 170 million yuan, year-on-year + 1.56%; realized cash flow of investment activities of-99 million yuan, year-on-year-173%, mainly for the company's value-added shares in the joint venture Bosheng new materials; cash flow of fund-raising activities-690 million yuan, year-on-year-46%, mainly for the company to distribute cash dividends increased year-on-year.
Profit forecast: the company's tobacco label business growth is steady, in recent years to deepen business diversification strategy, successfully expand bags, membrane materials and other incremental track, the company's new business orderly development, is expected to create a new growth point. We estimate that the company's net profit from 2022 to 2024 will be 642 million yuan, 756 million yuan and 884 million yuan respectively, with year-on-year changes of-18.2%, + 17.7% and + 17.0%, respectively. The current stock price corresponds to a 22-year PE of 13x.
Risk factors: the expansion of new business is not as expected and the risk of a sharp rise in raw material prices.