Main points of investment

Next Tuesday (November 1), there will be an inquiry for Sinorama shares, a company listed on the main board.

Guanghua shares (001333): the company has long focused on the research and development, production and sales of polyester resin for powder coatings; the products are widely used in building materials, general industry, household appliances, furniture, automobiles, 3C products and other fields. From 2019 to 2021, the company achieved operating income of 738 million yuan / 839 million yuan / 1.314 billion yuan, YOY of 7.85%, 13.70%, 56.60%, and a compound annual growth rate of 24.30%. The net profit of homing was 92 million yuan / 107 million yuan / 163 million yuan, and the YOY was 120.67%, 16.95%, 51.63%, respectively, and the annual compound growth rate of three-year net profit was 57.58%. During the latest reporting period, 2022H1 achieved an operating income of 673 million yuan, an increase of 7.57% over the same period last year, and a net profit of 72 million yuan, down 20.09% from the same period last year. According to the preliminary forecast, the company is expected to achieve a net profit of 97 million yuan to 108 million yuan from January to September 2022, down 15.50% to 24.11% compared with the same period last year.

Investment highlights: 1. The company is one of the leading enterprises in the field of polyester resin for powder coatings, with strong large-scale production capacity, and is expected to benefit from the continuous promotion of national environmental protection policy and the accelerated promotion of "paint powder". Up to now, the company has more than 180 models of polyester resin products, which can meet the different needs of weathering, anticorrosion and decoration downstream. At the same time, the company is one of the three major domestic manufacturers with a large-scale production capacity of more than 10,000 tons, with polyester resin sales of 71100 tons, 96600 tons and 105500 tons respectively during the reporting period, ranking second in the industry for many years in a row. and the company achieved 10.60% market share in 2020. From the perspective of the industry, compared with ordinary solvent-based coatings and waterborne coatings, powder coatings mainly made of polyester resin have the advantages of non-pollution, high utilization, low energy consumption and no organic solvents. In December 2021, the State Council issued a comprehensive work plan for energy saving and emission reduction in the 14th five-year Plan, which clearly requires that by 2025, the proportion of solvent-based industrial coatings will be reduced by 20%, bringing opportunities for the development of powder coatings. As one of the domestic head suppliers of polyester resin for powder coatings, the company is expected to benefit from the strengthening of industry concentration under the scale effect and the acceleration of infiltration of powder coatings under the help of environmental protection policies. 2. The company has long-term and stable high-quality customer resources, which lays a good foundation for the digestion of new production capacity. Since its establishment in 2014, relying on the comprehensive advantages of product technology and other aspects, the company has successively established long-term and stable business relations with well-known powder coating manufacturers at home and abroad, such as Akzo Nobel, Jordan Coatings, Qianjiang Hi-Tech and so on. the length of cooperation is basically more than 5 years. At present, the downstream powder coating industry is in a period of rapid development, and the demand for the core raw material polyester resin is gradually increasing; during the reporting period, the company's capacity utilization rate reached more than 100%, production and sales also exceeded 95%. Polyester resin products have been relatively saturated. In this context, the company plans to invest 426 million yuan in the construction of the "annual production capacity of 120000 tons of polyester resin for powder coatings", increasing the original production capacity of 99000 tons to 219000 tons; the fund-raising project has been built ahead of schedule, as of the end of June 2022, the amount of related projects under construction is 165 million yuan, and it is expected that the release of new production capacity will boost the company's performance.

Comparison with listed companies in the same industry: the company focuses on a series of special polyester resin products for powder coatings; according to the similarity of the main structure, Shenjian shares are selected as comparable listed companies of Sinorama shares. From the above comparable companies, the revenue scale of Shenjian shares in 2021 is 2.591 billion yuan, the comparable PE-TTM is 111.16X, and the sales gross profit margin is 15.04%. Comparatively speaking, although the revenue scale of the company is lower than that of the comparable company, its profitability is better than that of the comparable company; there may be great differences between the two sides, and the comparability is limited.

Risk hint: companies that have started the inquiry process still have the possibility of not being listed due to special reasons, the company content is mainly based on prospectuses and other public materials, and the selection of listed companies in the same industry is not accurate. Risk, content data selection may have interpretation deviation, specific listed company risk is displayed in the text content, and so on.