Main points of investment:
Years of deep ploughing cast polymer waterproof leading enterprises. The company is a domestic enterprise specializing in the research, development, promotion and application of polymer waterproof materials, and is one of the representative enterprises of polymer waterproof materials, through the differential competition strategy of polymer waterproof roll materials, rapidly promote and form a demonstration effect in the head real estate and important municipal construction projects. The company focuses on the field of polymer waterproofing, and the production capacity layout is becoming more and more perfect. At present, there are modern production bases in many places all over the country. in order to respond to the market quickly, the company continues to improve the industrial layout, invest in the construction of industrial bases in South China and East China (new), and seize the opportunity of the ecological and green integrated development demonstration zone of the Yangtze River Delta. build a world-class production base of polymer waterproof materials in Suzhou.
The bottom of the industry is up, and the new waterproofing regulations drive the industry to expand its market concentration. Since April 2022, the marginal improvement of real estate policy, the waterproof permeability of infrastructure has increased, and the demand of the waterproofing industry is expected to recover. On October 24, 2022, the new waterproofing regulations were launched, which will help to increase the demand for waterproof materials in construction and municipal works, thus driving the expansion of the industry, and at the same time accelerate the withdrawal of low-quality waterproof materials. drive the head high-quality waterproofing enterprises to accelerate the increase in market share. From the point of view of industry expansion, only considering the improvement of building waterproofing level and the waterproofing requirements of each project grade, the demand for each waterproofing project level is 50% 100%, and the waterproof grade of some buildings will also be upgraded. It is conservatively estimated that the demand for waterproof materials will be increased by more than 50%.
Differential layout of polymer materials to lay the foundation for long-term growth. At present, Karen Polymer Industrial Park is the largest production base of polymer coiled materials in China, with a planned production capacity of more than 100 million tons per year. It is estimated that the production capacity of polymer waterproof coiled materials on the company's import production line will reach 5200 million square meters by the end of 2022. The company avoids the Red Sea market where the price of ordinary waterproof materials competes, and focuses on the differentiation strategy of polymer waterproof materials. It is estimated that the revenue of polymer materials will account for 50% of the sales revenue by 2024.
Adjust the income structure, actively manage and control risks, and vigorously develop dealer business. The company focuses on central enterprises, state-owned enterprises, real estate, urban investment, urban construction, top 100 general contractors and other core customers, take the initiative to control risks, and strengthen customer risk identification and protection measures. in the future, the proportion of income from real estate customers will drop to 40%, and the income structure will be more reasonable. At the same time, the company vigorously expanded its dealer business, adding 194 new dealers from January to June 2022, an increase of 47% over the same period last year. It is estimated that the number of newly developed dealer customers will reach 1000 in 2022. The company is expected to develop 1000 new dealer customers each year in 2023 and 2024, and the cumulative number of dealer customers will reach 3000 by 2024, accounting for 60% of channel revenue.
Profit forecast and investment rating. We estimate that the return net profit of the company from 2022 to 2024 is 41 million yuan, 131 million yuan and 234 million yuan respectively, the corresponding EPS is 0.11,0.34,0.61 yuan respectively, and the corresponding PE is 130.45X, 40.51X and 22.58X. As a leading enterprise in the polymer waterproofing industry, the company has a prominent position in the industry, the new waterproofing regulations are expected to lead to the expansion of the industry, and the company's market share is expected to continue to increase, covering for the first time and giving a "buy" rating.
Risk tips: increased competition in the industry; prices of raw materials continue to rise; the promotion effect of polymer materials is not as expected; the repeated impact of the epidemic on the economy; adverse changes in industry policies; risks brought by fluctuations in the real estate industry.