Event: the company released its three-quarter report in 2020, with operating income of 1.135 billion yuan in the first three quarters, an increase of 28.37% over the same period last year, net profit of 174 million yuan, up 28.28%, and net profit of 160 million yuan, up 26.27% over the same period last year. Among them, Q3 realized operating income of 357 million yuan, an increase of 4.92% over the same period last year, and its net profit was 48.6302 million yuan, down 7.35% from the same period last year. The net profit after deducting non-profit was 44.5945 million yuan, down 9.11% from the same period last year.
Comments:
Stable operation, rising costs led to a year-on-year decline in performance in the third quarter. The company's Q3 realized operating income of 357 million yuan, a year-on-year increase of 4.92%, a gross profit margin of 29.38%, and a slight increase in 0.55pct. In terms of three fees, the rate of management expenses was 6.06%, which was basically the same as the same period last year. The rates of sales expenses and R & D expenses were 3.59% and 4.10% respectively, an increase of 0.42pct and 0.82% over the same period last year. The financial expenses were-602000 yuan, an increase of 3.649 million yuan over the same period last year. The net profit returned to the home was 48.6302 million yuan, down 7.35% from the same period last year, while the net profit after deducting non-profit was 44.5945 million yuan, down 9.11% from the same period last year.
The company is the leader of water treatment pharmaceutical industry. The company is a professional manufacturer of large-scale water treatment pharmaceuticals integrating research and development, production and sales. After years of development, the company has become one of the water treatment pharmaceutical manufacturers with the largest production scale and the most complete varieties and specifications in China. The company has a rich product line, including scale and corrosion inhibitor, scale inhibitor and dispersant, germicidal agent, chelating agent, slime stripping agent, cleaning pre-film agent, osmotic scale inhibitor, cleaning agent, fungicide and so on.
The growth rate of the water treatment industry is steady. Chemical water treatment technology refers to the use of chemicals to eliminate and prevent scaling, corrosion, bacteria and algae breeding and water quality purification technology, which is currently recognized as the most widely used effective means of industrial water saving at home and abroad. According to BCC Research, the global market for water treatment pharmaceuticals grew from $26.85 billion in 2015 to $34.46 billion in 2018 and is expected to reach $46.56 billion in 2023. Industrial / production water treatment, municipal / drinking water treatment, sewage / wastewater treatment and seawater desalination are the main downstream sectors, with market sizes of $11.675 billion and 102 respectively.
5 billion dollars, 8.005 billion dollars and 4.53 billion dollars. The company's existing products are mainly aimed at the slow-release scale inhibition market in industrial / production water treatment, with a total market space of US $3.74 billion.
The production capacity of water treatment agents continues to increase, and new projects expand to the blue ocean of fine chemicals. The company went public in November 2019, raising 844 million yuan for 280000 tons of water treatment agent projects, water treatment agent series products projects, R & D center construction and supplementary liquidity. In addition, the company also announced plans to use its own funds of 360 million yuan to build water treatment industry chain expansion project. The new project will promote the company's long-term growth in two ways: 1) capacity expansion. The company's existing production capacity is 265000 tons, and the total planned capacity of the investment project is 916000 tons. After the project is put into production, the company's market share will be further increased. At the same time, various green water treatment agents and granulation capacity will be added to the new project to meet the needs of different customers. 2) acetyl chloride, hydrochloric acid and other by-products will be produced in the production of the company's existing products, and the added value of the products is low. through long-term R & D investment, the company develops and reserves the process technology for producing a series of downstream fine chemicals using all kinds of by-products as raw materials. and these products are mainly faced with specific market segments, avoiding the fierce competition brought by bulk products. Through the construction of the new project, the company will expand its production capacity to the blue ocean of fine chemicals at the same time, and its profitability is expected to climb another high-rise building.
Profit forecast. It is predicted that the company's net profit from 2020 to 2022 is 240 million yuan, 313 million yuan and 431 million yuan respectively, and the EPS is 1.11,1.45 and 1.99 yuan respectively, corresponding to a PE of 26.6, 20.4 and 14.8X, maintaining the "buy" rating.
Risk reminder event: new project construction is not as expected, safety and environmental protection risk
