This report is read as follows:
The company's business structure has been continuously optimized, the proportion of high-margin dry powder and canned products continues to increase, capacity release, structure optimization, internal and external expansion to accelerate industry integration, seize the opportunity of domestic demand and export growth.
Main points of investment:
Maintain the target price of 33.12 yuan and maintain the overweight rating. The company released its 2019 annual report, and its performance was in line with expectations, maintaining the company's EPS of 0.63, 0.80 and 0.99 yuan in 2020-2022. Considering the continuous improvement of the competitiveness of the company's overseas export products and the strong ability to obtain orders, with reference to a certain valuation premium given by the industry, the company will be given a valuation premium of about 41 times PE in 2021, maintaining the target price to 33.12 yuan and maintaining the overweight rating.
The performance is in line with expectations, the product structure has been continuously optimized, and the profitability has improved significantly. 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 89.32%. Benefiting from the increase in the proportion of high gross margin products, the company's comprehensive gross profit margin and net profit margin reached 21.28% and 7.03% respectively, increasing 2.98pct and 1.63pct year-on-year, and the profit level increased significantly.
The revenue scale and gross profit margin of dry powder and can easy-to-open lid increased rapidly, and the price of beverage easy-to-open lid competitive products declined. After the acquisition of Slam Packaging, the scale of the easy-to-tear cover products in the company's dry powder lid further increased, and the gross profit margin of the dry powder easy-to-open lid increased by 2.20pct compared with the same period last year; the can easy-to-open lid benefited from the completion and production of the initial investment project and the optimization of customer product structure, and the gross profit margin increased 9.23pct significantly. Beverage easy to open the lid, due to fierce competition in the industry, product prices have declined, gross profit margin reduced 4.82pct, but beer canning rate increased and slimming cans launched and other favorable factors, the future development trend is still good.
The company can easy to open the lid to increase the project to seize the opportunity of domestic demand and export growth, internal repair and external expansion to accelerate industry integration. With the spread of the global epidemic, the demand for canned products in overseas markets has increased. The company will add 4 billion pieces of canned products easy to open and cover, and actively expand downstream customers to seize market growth opportunities. Through built-in capacity and extension mergers and acquisitions to accelerate industry consolidation, the company's bargaining power to promote profitability repair, enjoy the global demand market space, the orderly release of new capacity will significantly improve performance.
Risk hints: raw material price fluctuation risk, M & An integration risk, overseas demand fluctuation risk