The company's revenue in 2022 grew 7.30% year on year, and Guimu's net profit grew 565.29% year on year. The company disclosed its 2022 annual report: revenue for the full year of 2022 was 5.834 billion yuan, +7.3% year on year; realized net profit of 204 million yuan, +565.29% year on year; achieved net profit of 197 million yuan after deduction, +464.57% year on year. The company achieved revenue of 1,554 million yuan in 22Q4, +13.92% year on year, +3.67% month on month; realized net profit of 42 million yuan, +162.69% year on year, -1.84% month on month; achieved net profit of 39 million yuan after deduction, +155.52% year on year, -7.84% month on month. Furthermore, the company plans to distribute a cash dividend of 0.5 yuan (tax included) for every 10 shares to all shareholders.
The company's gross margin and net interest rate have risen sharply. The company's gross sales margin in 2022 was 10.18%, up 2.49 percentage points from 2021; net sales margin was 3.49%, up 4.35 percentage points from 2021. The increase in profit margins was mainly due to strong demand for battery aluminum foil in 2022, the release of production capacity of the subsidiary Zhongji Battery aluminum foil in Anhui, and the increase in the share of high-value-added products in the gross profit structure. At the same time, the company's period expense ratio continued to decline. In 2022, the sales expense ratio was 0.94%, the management expenses rate was 3.73%, the financial expenses rate was 1.34%, and the R&D expenses rate was 1.53%.
The company sold 154,900 tons of aluminum foil products in 2022, an increase of 25% over the previous year. In the aluminum processing business segment, the company achieved sales volume of 154,900 tons in 2022, including 53,600 tons of aluminum strip and 101,300 tons of aluminum foil (Jiangsu Zhongji 74,000 tons of packaging foil+27,300 tons of battery foil from Anhui Zhongji).
According to the progress of project commissioning, it is estimated that the sales volume of the company's aluminum processing products in 2023-2025 will be 14.1/19.0/235,000 tons, respectively. Overall sales in 2023 declined slightly compared to 2022, mainly because the company will gradually reduce the export volume of blanks in the future. After the 2024H2 Anhui Zhongji Phase III battery foil project is put into production, the blanks will be completely self-supplied. Part of the decline in overall sales of aluminum processed products is due to a decline in the export volume of low-value-added aluminum foil billet products. By product, the production and sales volume of battery foil and coated carbon foil will both increase significantly in the next few years. It is estimated that in 2023-2025, sales of battery foil photofoil will be 5.2/99/127,000 tons, respectively, and sales of coated carbon foil will be 0.4/19/34,000 tons respectively.
Risk warning: the risk that demand for aluminum battery foil falls short of expectations; the risk that aluminum prices will fluctuate greatly; the risk that product profitability will decline due to fierce market competition.
Investment advice: Maintain a “buy” rating. The company's revenue for 2023-2025 is estimated to be 63.44/82.57/9.871 billion yuan, a year-on-year growth rate of 8.74% /30.15/ 19.55%; the net profit of the mother was 2.77/473/596 million yuan, a year-on-year growth rate of 35.57%/70.55%/26.08%; the diluted EPS was 0.30/0.52/0.66 yuan, and the current stock price corresponding to PE was 26.6/15.6/12.3x. Considering that the company's battery foil is about to enter a rapid release period, the growth rate of battery aluminum foil product production in 2023 is expected to reach 90% compared to 2022, and profits are expected to increase accordingly, maintaining the “buy” rating.