This report is read as follows:
The company's performance in 2019 is slightly lower than expected, but in the long run, the company will actively seize the opportunities of mergers and acquisitions, promote the optimization of product structure, release new production capacity in an orderly manner, enhance industry concentration, and will continue to thicken its performance in the international market.
Main points of investment:
Raise the target price to 25.33 yuan to maintain the overweight rating. The company released its 2019 annual results of KuaiBao, which was slightly lower than expected, reducing the company's 2019 EPS to 0.41 yuan (- 0.04). The epidemic will have a negative impact on domestic beverage and beer sales. The production of new capacity may be delayed and the EPS will be reduced to 0.63 (- 0.09) / 0.80 (- 0.16) yuan in 2020-2021. Considering that the company is in a leading position in the field of easy-to-open cover, with a complete product line, continuous improvement in the competitiveness of overseas export products, high order acquisition capacity and strong certainty, a certain valuation premium is given to the company with reference to the industry, giving the company about 40 times PE in 2020, raising the target price to 25.33 yuan and maintaining the overweight rating.
Q4 quarter-on-quarter sales decline, performance slightly lower than expected. In 2019, the company achieved revenue of 1.17 billion yuan, an increase of 42.91%, and a net profit of 80 million yuan, an increase of 89.60%. Among them, Q4 single-quarter revenue and return net profit is 331 million yuan and 15 million yuan, the profit growth rate is slightly lower than expected.
Easy-to-open lid and metal can manufacturing specialization, metal packaging permeability and application field is expected to continue to improve. With the use of metal packaging in the food and beverage industry and the increase of per capita consumption, the scale of metal packaging will continue to increase. Well-known brand FMCG production enterprises tend to independently choose easy-to-open lid and metal can suppliers, high-quality leading enterprises will significantly benefit from the improvement of market concentration.
Internal repair and external expansion accelerate industry integration, capacity release, structural optimization, and synergy. The company accelerates industry integration through built-in production capacity and extension mergers and acquisitions, and the enhancement of discourse power and bargaining power will promote upward repair of profitability, and there will be room for price increase in the future; the company has a relatively complete metal packaging product system, it can meet the one-stop purchasing needs of customers, benefit from the export tax rebate policy dividend, the company enjoys the global demand market space, and the orderly release of new production capacity will significantly improve performance.
Risk hints: raw material price fluctuation risk, M & An integration risk, other material packaging competition risk