Brief comment on performance
The company released its 2021 annual report on April 25, with operating income of 1.54 billion yuan in 2021, an increase of 33.55% over the same period last year, net profit of 63 million yuan, down 2.36%, and non-return net profit of 37 million yuan, down 32.78% from the same period last year. Q4 achieved a net profit of 13 million yuan in a single quarter, down 26.07% from the same period last year and an increase of 34.97% over the same period last year, deducting 1.0032 million yuan in non-return net profit.
Business analysis
The sales of LCP are growing rapidly, and the domestic replacement is accelerated. In 2021, the company achieved rapid expansion of LCP products, sales increased by 104% over the same period last year, revenue reached 198 million yuan, up 63.13% over the same period last year, and net profit reached 19.31 million yuan, an increase of 130% over the same period last year. Last year, the company accelerated the introduction of LCP products to customers and has become a material supplier for Amfino and Morse. In March this year, the company officially started the construction of a new 20,000 tons of LCP resin material project, which is expected to be put into production in June 2022, when the company is expected to become the world's largest LCP supplier, and domestic replacement is being accelerated.
The company's short-term profits fell as costs came under pressure in the fourth quarter. The company was affected by the sharp rise in the prices of key raw materials in the fourth quarter of last year, and its profits declined in the short term, among which the net profit of LCP products in the second half of 2021 was about 4.13 million yuan, which was much lower than that of 15.18 million yuan in the first half of 2021. We believe that with the promotion of the localization of raw materials this year, product profits are expected to return to the normal level and follow the volume of products to achieve steady profit growth.
The special engineering plastics project has been put into production in an orderly manner and is optimistic about the long-term growth of the company. In addition to LCP materials, the company's high-performance polyamide (PPA), polysulfone, poly (aryl ether ketone) (PAEK) production lines have been completed. After the first phase of PPA was approved by customers, the company launched the construction and design work of the second phase of PPA. In addition, the company's 6000 t / a polysulfone project and 1000 t poly (aryl ether ketone) project are also expected to be put into production this year. Zhejiang Kesai's fluorine material processing business is profitable, and with the completion of its 10,000-ton base in the future, the profit is expected to rise to a higher level.
Investment suggestion
The company's special engineering plastic platform is gradually taking shape, and we are optimistic about the long-term growth of the company as a high-end material platform. It is predicted that the return net profit of the company from 2022 to 2024 is 1.50,2.65 and 437 million yuan respectively, the EPS is 0.66,1.17,1.92 yuan respectively, and the corresponding PE is 22.4,12.6,7.6 times respectively.
Risk hint
The cost of key raw materials has risen sharply; the release of special engineering plastics has fallen short of expectations; and competition in the industry has intensified.