Main points of investment:
Valuation is on the high side, there is room for imagination in capital operation, and the "overweight" rating is maintained for the time being. We expect the company's EPS for 11-12 years to be 0.12 yuan and 0.15 yuan respectively (based on the latest share capital 1.286 billion shares), and the company's current share price (6 yuan) corresponds to 50 times and 40 times PE for 11-12 years respectively. Compared with Zijiang enterprises with the same PET packaging, the valuation is obviously on the high side, which implies the premium expected by the market for the exit mode after the high-priced acquisition of CVC, and temporarily maintains the "overweight" rating.
The reported performance was lower than expected. The company's 11H1 realized sales revenue of 1.881 billion yuan, an increase of 17.4% over the same period last year; net profit of 68.7522 million yuan, down 12.8% from the same period last year; and earnings per share, which was lower than we expected (0.08 yuan, calculated on the basis of the latest equity of 1.286 billion shares). The net cash flow generated by operating activities per share is 0.34 yuan. Of this total, Q2 realized sales revenue of 1.064 billion yuan, an increase of 20.6% over the same period last year, and net profit of 37.8654 million yuan, down 28.5% from the same period last year.
Income grew steadily in the first half of the year, raw material prices and labor costs were under upward pressure, and gross profit margin fell somewhat. Beverage packaging products still contribute to the company's main profits (79% of 11H1 revenue and 88% of gross profit); the "Taiwan plasticizer" incident had a negative impact on the company's hot-filled bottle and billet sales in the short term, and the company seized the opportunity of high temperature to timely adjust the product structure and increase the production and sales of carbonated products, so that the overall revenue in the first half of the year still achieved 17.4% growth. Due to the high prices of the main raw materials PET chips and PET film, as well as upward pressure on labor costs, 11H1 gross profit margin fell 2.5 percentage points year-on-year to 21.0%. During the first half of the year, the expense rate fell 1.5 percentage points to 12.7% compared with the same period last year, mainly due to the decline in gross profit margin and the gradual expiration of tax incentives, and the effective income tax rate rose, resulting in a 1.3% year-on-year drop in net profit and a 12.8% drop in net profit compared with the same period last year.
It is determined that additional investment projects will be carried out in an orderly manner to lay the foundation for future growth. The bottle blowing line expansion project, one of the company's 10-year investment projects, has been put into production in December, and the bottle preform line expansion project has been put into production one after another, which is expected to be completed by the end of 12 years; the remaining funds of the bottle preform line will also be invested in the expansion project of the new bottle blank line / bottle blowing line / filling line.
With the expansion of the production scale, the financial pressure of the company has further increased, and it is proposed to issue medium-term notes with a five-year maturity of no more than 1.18 billion yuan (currently under examination and approval) to repay bank loans and replenish liquidity. The company continues to improve the layout of the soft drink packaging market, laying the foundation for long-term development in the future, while the company's advantage lies in the relatively perfect industrial layout of major cities across the country, especially in the central and western regions with greater consumption potential.
Core hypothetical risk: integration expectations change and upstream raw material prices fluctuate significantly.