In 21 years, the company's revenue reached 1.781 billion yuan, an increase of 39.7% over the same period last year. The net profit returned to the mother was 226 million yuan, an increase of 56.2% over the same period last year. We believe that the traditional business development of Lottery Chemical is solid, while ferric phosphate, BPDA and other new materials have great potential and will become a new pillar business. Finally, we maintained our target price at HK $2.4, corresponding to a 22-year price-to-earnings ratio of 7.3 times forecast earnings, with 70% room to rise from the current price and maintain the buy rating.
Summary of the report
21-year net profit soared by 56%. In 21 years, the company's revenue reached 1.781 billion yuan, an increase of 39.7% over the same period last year. The net profit returned to the mother was 226 million yuan, an increase of 56.2% over the same period last year. The gross profit margin was 30.3%, down 3.6 percentage points, and the net profit rate was 12.7%, an increase of 1.3 percentage points.
The traditional business is developing steadily, and the new ferric phosphate business has great potential for development. In 2021, the company's traditional business revenue of dyes and intermediates was 1.25 billion, an increase of 25% over the same period last year, accounting for 70%, making it the largest business. The income of raw material intermediates was 350 million, up 39% from the same period last year, accounting for 20%, and the battery materials business was 170 million, with a substantial increase of 2006% over the same period last year, accounting for 10%. The rapid growth of battery materials business is due to the simultaneous increase in the quantity and price of iron phosphate and great potential for future development.
It will be renamed as Lottery New Energy Technology Co., Ltd., representing the future development direction. In 2017, Lottery Chemical began to enter the field of new materials for new energy batteries, establishing the first iron phosphate production line. Through continuous technology upgrading, it has been recognized by a large number of customers, such as Bertre, Guoxuan Hi-Tech, Zhongtian Technology, OSai Technology and so on. By March 2022, Lottery Chemical has a production capacity of 30,000 tons of iron phosphate, with a new production capacity of 50,000 tons under construction. It is estimated that the total production capacity of iron phosphate will reach 80,000 tons by the end of the 22nd. Laike Chemical plans to change its name to Laike New Energy Technology Co., Ltd., on behalf of the company, ferric phosphate, BPDA and other business will be listed as the focus of development, and will devote more personnel and resources to pursue faster development. The company's long-term goal of iron phosphate production capacity will reach 150000 tons in 2025, growing into a world leader in iron phosphate industry.
The spin-off business is listed on the new third board. On April 10, 2022, Hebei Laike New material Technology Co., Ltd. submitted a formal listing application to the National small and medium-sized Enterprise share transfer system Co., Ltd., which is expected to be completed in the second half of the year. After staying on the new third board for 12 months, it will apply for listing on the North Stock Exchange. Spin-off and listing will broaden the company's financing channels.
Maintain the target price of HK $2.4, buy rating. We believe that the traditional business development of Lottery Chemical is solid, while ferric phosphate, BPDA and other new materials have great potential and will become a new pillar business. Finally, we maintained our target price at HK $2.4, corresponding to a 22-year price-to-earnings ratio of 7.3 times forecast earnings, with 70% room to rise from the current price and maintain the buy rating.
Risk hint: industry competition intensifies; epidemic situation intensifies.
