According to Kaili's semi-annual report for 2022, the operating income in the first half of the year was 847 million yuan, + 18.83% compared with the same period last year, and the net profit was 128 million yuan, + 54.81% compared with the same period last year. Q2 realized revenue of 533 million yuan, + 36.12% over the same period last year, and realized net profit of 73 million yuan, + 35.04% over the same period last year.
Revenue and profits reached new highs, while pharmaceutical and basic chemical industries maintained rapid growth during the epidemic prevention and control period. Q2's revenue and profit level reached a record high in a single quarter, with a gross profit margin of more than 20% for two consecutive quarters, and profit growth exceeding market expectations. The company's report also disclosed the breakdown of the business structure, in which revenue increased by 17.6%, 9.84% and 678.99% respectively according to the split of sales / processing / technical services. According to the split of downstream application areas, the revenue of the pharmaceutical / pesticide / basic chemical sector increased by 28.18% 12.87% and 44.09% respectively, continuing the momentum of steady growth of pharmaceuticals and rapid growth of basic chemicals. (the change of business structure has a great impact on the fluctuation of operating income and gross profit margin, and the reference significance of the index is weak.) the turnover materials in the inventory of the company's balance sheet items in the first half of the year are expected to grow rapidly, which is more than 156 million yuan in the first half of the year, an increase of more than 70% compared with the 2021 annual report. We have stressed many times that this index guides the growth of the company's processing stock business. And the expected release of processing business revenue in the future, we believe that the company's business is developing well, even under the situation of epidemic prevention and control in Shaanxi in the first quarter and the Yangtze River Delta in the second quarter, it still creates a new high profit level and a good foundation for business development, and future growth is still expected.
PVC gold-based mercury-free catalyst demonstration plant won the bid and opened the market door the company won the Shaanxi Jintai chlor-alkali Shenmu chemical mercury-free catalyst project in August, which is the first mercury-free catalyst demonstration plant in China, and Kaili new materials won the bid amount of 37.92 million yuan. According to the calculation of the domestic consumption of 17.816 million tons of PVC by the calcium carbide method in 2021, the processing fee may reach 2.25 billion yuan after full replacement, conservatively according to the 50% gross profit margin of the company's processing business, the profit margin is 1.13 billion yuan. The calculation process is relatively conservative, the consumption rather than the production capacity, and the processing fee are extrapolated according to the first unit, while the quotation of the first unit is highly competitive, and the basic chemical production capacity is large, and the processing gross profit margin is also conservative according to the company's history. In the future, with the implementation of the environmental protection policy, the profit space of more than 1 billion is expected to be opened. As the catalyst supplier of the world's first demonstration plant, the future market is expected.
With continuous R & D investment and investment in projects under research, new products can be developed in the future. Northwest Nonferrous Metals Research Institute, a major shareholder of Kaili New Materials, is the leading non-ferrous metal research institute in China, while Kaili relies on the Northwest Institute and independent R & D personnel to reserve projects with large development space, including hydrogen fuel cells and hydrogen energy-related products, hydrogenated nitrile rubber (HNBR) catalysts. As well as PDH, coal to ethylene glycol and other catalysts with large space in the chemical field, relay PVC and medicine in the future are expected to form new growth points.
Profit forecast: we maintain the profit forecast for 2022-2024 and predict that the company will achieve a net profit of 2.42 million yuan and maintain a "buy" rating.
Risk hint: the epidemic led to shutdown; the promotion of PVC catalyst was not as expected; the price of precious metals fluctuated.