The company released its 2022 annual report. The company achieved revenue of 5.834 billion yuan in 2022, +7.3% year on year, net profit of 204 million yuan, +565.3% year on year, after deducting 197 million yuan from non-return mother, +465% year on year.
22Q4 achieved revenue of 1,554 million yuan, +13.92% year on year, net profit of 41,51006 million yuan, +163% year on year, after deducting 390.65 million yuan from non-return mother, +155.5% year on year.
Aluminum foil: Downstream demand is strong, and electronic aluminum foil production capacity continues to increase. Downstream demand for aluminum foil was strong, company orders were full, and production capacity increased step by step during the boom cycle. The company's aluminum processing business reached 3.682 billion yuan in 2022, +29.24% year on year. The gross margin was +6.67 pct to 13.6% year over year. The total sales volume of aluminum foil was 101,300 tons, of which Jiangsu Zhongji and Anhui Zhongji were 74/27,300 tons respectively. 22Q4 was affected by downstream power battery production and fluctuations in demand for traditional packaging foils. Aluminum foil sales were 25,700 tons, -3% month-on-month. Jiangsu Zhongji/Anhui Zhongji 192/065 million tons respectively, +5.5%/-21.7% month on month.
The construction of new production capacity is speeding up, and the volume is imminent: the company's second phase, 32,000 tons of battery foil, entered the equipment installation stage in early 2023; the third phase has completed the main equipment order and will be put into production as early as 24H2. The production capacity of 22-24E battery foil is expected to be 4/72/172,000 tons respectively. Medium- to long-term sodium electricity+carbon foil coating opens up room for growth. The size of the company continues to increase and bind leading customers, and order certainty has increased.
The functional membrane business has been strengthened, and cutting-edge products continue to be developed. The revenue of the functional membrane business in 2022 was 24.782,900 yuan, -25.77% year on year. The company is focusing on cutting-edge tracks such as high-barrier films, car coat films, energy-saving films, etc., to accelerate the development of new product markets. Among them, portable photovoltaic products and cooking resistant high-barrier films have been mass-produced and supplied to customers. In addition, relying on the research and development foundation of membrane products, the company focuses on developing and promoting composite copper films. According to the announcement, the company's ultra-thin copper film for power batteries has entered the roll sample submission stage.
Paper packaging is under pressure in the short term, and I am optimistic about falling costs and a recovery in demand. Due to the slowdown in terminal consumer demand in 2022, paper packaging revenue was 459 million yuan, -9.33% year on year, paper trade revenue was 1,518 million yuan, -17.96% year on year. The gross margin of the paper packaging & trade business remained basically the same. Currently, the price of white cardboard has fallen below 5,000 yuan/ton, reaching a low level in the past five years. At the same time, along with downstream recovery, I am optimistic that the paper packaging business will recover upward quarter by quarter.
Investment advice. The company's net profit of 23-25E is estimated to be 285/4.22/534 million yuan respectively, +39.1%/+48.3%/+26.7% year-on-year respectively. The corresponding PE is 26.5X/17.8X/14.1X, maintaining the “buy” rating.
Risk warning. Raw materials rose sharply, exchange rate fluctuations, production capacity investment and new product promotion fell short of expectations.