Profits fell in 2022. In 2022, the company realized operating income of 504 million yuan,-21.28% compared with the same period last year, and net profit of 65.35 million yuan,-47.17% compared with the same period last year. In a single quarter, 1Q22-4Q22 achieved a net profit of 29.36 million yuan, 21.23 million yuan, 8.1 million yuan and 6.67 million yuan respectively. The decline in corporate profits in 2022 was mainly due to higher prices of upstream raw materials, weaker downstream demand such as consumer electronics, and the partial shutdown of 3Q22 due to high temperatures. The company intends to pay a cash dividend of 10 yuan (including tax) to all shareholders for every 10 shares.

Film production and sales declined compared with the same period last year, with profits per ton under pressure. In 2022, the company produced 44300 tons of polyester film,-13.95% year-on-year; sales of 39200 tons,-22.12%; production and sales rate of 88.40%, down 9.27% from the same period last year. According to our estimates, the price per ton of thin film (excluding tax) of the company in 2022 is about 12664 yuan / ton, which is + 1.05% compared with the same period last year, which is basically stable. We think it is mainly due to the increase in the sales proportion of the company's high unit price of colored optoelectronic base film and other functional films; the net profit per ton of thin film is 1668 yuan / ton, which is-32.17% compared with the same period last year.

The production capacity of thin film is expanding steadily, and the downstream application field is broadened. In 2022, the company will have a thin film production capacity of 42000 tons and a construction capacity of 73000 tons under construction (including 38000 tons for fund-raising projects and 35000 tons for self-financed construction projects). The new production capacity will further enhance the order-taking capacity of products in optical film substrate, photovoltaic, new energy and other areas. Among them, 38000 tons of fund-raising projects are expected to invest 436 million yuan, with a planned production capacity of 18,000 tons / year of functional films (colored optoelectronic base film, transparent film and other functional films) and 20,000 tons / year of optical base film, enriching the company's product range.

Adhere to technological innovation and focus on "differentiation and functionality". The company insists on R & D investment, with R & D investment exceeding 2000 million yuan / year from 2021 to 2022. In 2023, the R & D center of the company's headquarters will be completed and put into production. Based on the existing technical system, we will further deepen the development of special films in consumer electronics, new energy, automotive and other industries on the basis of functional films such as colored optoelectronic base film, window film and cell special film, and optical base film such as ITO.

Profit forecast and investment rating. We estimate that the return net profit of the company from 2023 to 2025 will be 109 million yuan, 214 million yuan and 282 million yuan respectively, and the EPS will be 1.36,2.67,3.52 yuan respectively, and the BPS19.11 will be 2023 yuan. With reference to the comparable company valuation, according to the 2023 PE 25-28 times, the reasonable value range is given a reasonable value range of 34.00-38.08 yuan (corresponding to the 2023 PB 1.8-2.0 times), maintaining the "better than the market" rating.

Risk tips: product prices fluctuate sharply; the progress of new projects is not as expected; the price of upstream raw materials fluctuates sharply.