Main points of investment
Event: the company announced that it intends to invest in the construction of "20 billion / year high-end health protection nitrile gloves project" in Linyi, Shandong Province, with a total investment of 2.45 billion yuan.
The production capacity of nitrile gloves is expanded again, further consolidating the company's leading position in the world. With the continuous expansion of the company's production capacity, by the end of 2020, the company's annual production capacity of PVC gloves and nitrile-butadiene gloves exceeded 20 billion / year and 6 billion / year respectively, a significant increase compared with 2019. Following the announcement of the 30 billion / year nitrile glove project in June 2020, considering the continued strong demand for gloves brought about by the COVID-19 epidemic and the increased awareness of health protection in various countries, it is expected that the strong global demand for protective equipment will continue. Therefore, the company plans to invest 2.45 billion yuan to build 20 billion nitrile gloves per year. After the project is completed and put into production, the total production capacity of the company's medical and protective gloves will reach nearly 80 billion / a, including medical nitrile gloves, PVC gloves, latex gloves, surgical gloves and other types of gloves, becoming the company with the most complete glove category, the most reasonable industrial layout and the most complete industrial chain.
The overseas epidemic situation continues, the glove industry continues to be booming, and the company has multiple advantages such as raw material supply and automatic production. Under the global COVID-19 epidemic, the serious imbalance between supply and demand of gloves has led to a continuous rise in glove prices. considering that gloves require high technology and capital scale, and it is difficult to release production capacity quickly, we expect glove prices to remain high in the medium term. bring a sustained boom in the industry. Through 10 years of independent research and development, the company has become the world's leading automated intelligent chemical plant, giving the company competitive advantages in efficiency, stability, quality and cost; in addition, the enterprises under the Lanfan Group can partially supply the main raw materials needed by the company, better grasp the price trend of the industry, and have a strong upstream and downstream pricing power.
Cardiovascular business is under short-term pressure, and drug balloons, heart valves and other important new products have been put on the market one after another in the medium and long term.
In 2020, the company's cardiovascular business continued to be negatively affected by the epidemic at home and abroad, and the company won the bid at the lowest price in the national stent collection result, which we expect may have a negative impact on the company's domestic stent business, but considering that the heavyweight varieties BioFreedom and rapamycin family drug balloons are expected to be approved one after another in the next 1-2 years, superimposed with advanced European TAVR products, it is expected to hedge against the possible negative impact of domestic stent business. The company has long-term sustained growth.
Profit forecast and valuation: we adjust the profit forecast. It is estimated that the company's revenue from 2020 to 2022 will be 79.99 yuan, 140.28 yuan and 14.638 billion yuan, an increase of 130.15%, 75.37% and 4.35% over the same period last year, and its net profit will be 31.42 yuan, 51.87% and 3.641 billion yuan, respectively. An increase of 540.74%, 65.11%,-29.81% (before adjustment, 564.42%,-35.00%,-17.88%) The corresponding EPS were 3.26,5.38,3.78 respectively. In view of the fact that the volume and price of the company's glove business has risen in both volume and price under the epidemic, resulting in sustained high growth, cardiovascular innovative equipment products are about to enter the harvest stage and maintain a "buy" rating.
Risk hints: product market promotion does not meet the expected risk, policy change risk, product research and development failure risk, the impact of glove price fluctuations.