Event
The company disclosed that the results achieved month-on-month growth in the third quarter of 2022 as scheduled. In the first three quarters of 2022, the company achieved revenue of 1.126 billion yuan, an increase of 30.14% over the same period last year, and a net profit of 278 million yuan, a year-on-year increase of 177.34%. The net profit after deducting non-return was 295 million yuan, a year-on-year increase of 298.26%. Of this total, Q3 achieved a net profit of 131 million yuan in a single quarter, an increase of 15.80% over the previous quarter, and a net profit of 133 million yuan after deducting non-return, an increase of 15.26% over the previous quarter.
Brief comment
The company's main business PVP and Oruizi volume profit rose together, precision medical business deposit repair space company in the first three quarters of 2022 comprehensive gross profit margin of 49.85%, of which Q3 single-quarter gross profit margin of 52.25%, month-on-month + 4.11pct. The company's fine chemical products are polyvinylpyrrolidone (PVP) and Orezi. 2022H1 sold nearly 7000 tons of PVP, an increase of about 2000 tons over the same period last year, and is expected to sell 15000 tons this year. According to Baichuan Yingfu, the average price of BDO, the main raw material of Q3, fell 46% month-on-month, leading to a significant improvement in the company's PVP profitability.
The company's Oruizi products are mainly used in the field of oral care. 22H1 sales are more than 600 tons, an increase of more than 300 tons over the same period last year, and sales are expected to reach more than 1100 tons this year. Affected by the epidemic and other factors, the company's precision medical business performance is under pressure, still losing money in the third quarter, there is more room for improvement in the future, and the company aims to gradually reverse losses. In addition, the company's investment in the Hong Kong stock Yongtai Biology caused a fair value change loss of 28 million in the first three quarters of 2022, causing short-term performance disturbance.
The suspension of production at BASF and the rapid development of new energy demand have brought a high boom in PVP, and the company has seized the opportunity to actively expand its capacity and increase its market share.
The stock market of the global PVP industry is nearly 100,000 tons / year, and the main manufacturers are BASF, Ashland and the company. BASF's European production capacity has been greatly reduced since the middle of the year, and production was suspended in early September, resulting in an increase in the company's overseas market share. At the same time, the demand growth rate of PVP in the field of new energy is relatively high. At present, it is mainly used as carbon nanotube dispersant in lithium iron phosphate cathode paste. The potential emerging demand also includes photovoltaic silver powder dispersant, sodium conductive system dispersant and so on. The company has an existing PVP capacity of 13,000 tons / year (higher actual production), and is building 20,000 tons of NVP capacity (PVP upstream monomer) in Jiaozuo Central Station, which is expected to be put into production in the second quarter of next year. The company's medium-and long-term PVP production capacity exceeds 30,000 tons / year. The company sold 1000 tons of PVP products in the new energy sector in the first half of this year, and is expected to exceed 2000 tons for the whole year, and is expected to more than double next year. The average price of PVP products is about 50,000 yuan / ton in previous years, but it has been raised to 70-80,000 yuan / ton of 22H1 with the sharp rise of raw material BDO in 21 years.
After BASF announced the suspension of production, the company announced an increase of 5-8% in the price of the industrial-grade Kmuri 30, the mainstream model of PVP. The rational increase is mainly for the purpose of maintaining and opening up customers in order to digest the new production capacity in the future, so as to further increase market share.
Layout NMP-BDO Integration Project to further expand the Industrial chain
The upstream industrial chain of NMP and PVP has something in common. The company plans to invest 1.35 billion yuan to build 100000 tons of NMP and 120000 tons of BDO upstream and downstream integrated new energy industry project, of which the first phase is scheduled to start in June 2023 and completed in June 2024, with a total investment expected to be 700 million yuan, including 60,000 tons / year BDO, 100,000 tons / year GBL, 100,000 tons / year NMP production capacity.
Profit forecast and rating:
We estimate that the company's net profit from 2022 to 2024 will be 4.34,6.83 and 806 million yuan, and the EPS will be 1.26,1.99,2.35 yuan respectively.
Risk Tips:
After the resumption of production of BASF's PVP capacity in Europe, customers return, or the overseas macroeconomic recession affects market demand, resulting in a decline in the company's overseas market share. The higher-than-expected production expansion of other domestic manufacturers led to a decline in the price of PVP products. Assuming that the average sales price of PVP dropped by 10,000 yuan per ton, the company's forecast net profit for 2023 and 2024 was 5.31 yuan and 620 million yuan, which was 22% and 23% lower than the current forecast. The construction and commissioning progress of the company's new NVP/PVP capacity was lower than expected. Lithium cathode paste conductive dispersant and other emerging downstream demand for PVP is not as expected, unable to fully absorb the company's medium-and long-term new production capacity.
