Event: The company released its 2022 report and the first quarter report of 2023
Results in '22 were under pressure, and gross margin increased steadily: the company's revenue for the year 22 was 1.88 billion yuan, YOY -5.4%; net profit of Gimu was 170 million yuan, YOY -20%; net profit of non-Gumo was 140 million yuan, YOY -18%, and performance in '22 was under pressure. By business: 1) Annual revenue of electronic grade adhesive materials was 840 million yuan, yoy +26.4%; 2) revenue of film packaging materials was 4.7 billion yuan, yoy -14.4%; 3) revenue of functional film materials was 450 million yuan, yoy -20.5%. The company's revenue fell short of expectations due to shrinking demand for functional film materials and electronic grade adhesive materials. Especially in the fourth quarter, sales and delivery were significantly affected by the external environment. The company's gross margin in 22 was 29.7%, +2.7pct compared to the previous year. The company continued to launch high-value-added products, the gross margin of its core business increased steadily, and future profitability can be expected. R&D expenses are 130 million yuan, YOY +16.5%. The company is continuously upgrading its products to accelerate the deployment of high-end markets.
Profit growth resumed in the first quarter of '23, and continued to increase R&D product structure upgrades: 23Q1 achieved revenue of 480 million yuan, yoy +1%; net profit of the mother was 0.2 billion yuan, yoy +13.8%; after deducting the net profit of the non-return mother of 0.2 billion yuan, yoy +13.4%, revenue and return mother achieved growth due to the restoration of downstream consumer electronics demand. The performance was in line with expectations. The company's gross margin for the first quarter was 25.0%, +1.4 pct year on year, and the R&D rate was 8.2%, +3.3pct year on year. The company continued to increase its investment in developing new products, the raw material self-production rate increased, and the product structure was continuously upgraded to ensure that the company's profitability remained stable.
Core customers continue to break through, and OCA optical adhesives and new energy functional materials are expected to drive growth: Relying on the company's cost advantages and technical advantages, the company has established cooperative relationships with leading domestic and foreign companies. The customer base is stable and high-quality. The “embedded” R&D system with high collaboration with customers effectively increases customer stickiness and lays a quality foundation and platform foundation for further market development in the future. The company is deeply involved in fields such as OCA optical adhesives, high-end membrane materials and PET materials. At the same time, application fields have also rapidly expanded to downstream areas such as automotive electronics and new energy lithium batteries. The company's business presents a “OCA optical adhesive+new energy functional material” two-wheel drive pattern. Along with continuous innovation in VR optics and displays, rapid growth in smartphone folding screen penetration, and continuous growth in sales of new energy vehicles, it is expected that the company's two major businesses will continue to increase in volume and price.
Profit forecast and investment rating: We adjusted the profit forecast based on changes in downstream consumer electronics demand, etc., and the net profit attributable to the mother for 23-25 was adjusted to 35/5/70 billion yuan (the value before 23/24 was 4/62 billion yuan), and the corresponding PE was 20/14/10 times, respectively. Based on comprehensive factors such as optimism about the long-term trend of the company's high-end membrane materials industry and the continuous strengthening of the company's core competitiveness, we continue to be optimistic about the company's future growth trend and maintain the “buy” rating.
Risk warning: downstream demand recovery falls short of expectations; new product certification falls short of expectations; raw material price fluctuations