Middle and high-end silicon dioxide industry leader, a wide range of product applications. The company is mainly engaged in the research and development, production and sales of middle and high-end nano-silica new materials and the sales of coating auxiliaries; self-produced silica products include matting agents, adsorbents, mouth-opening agents and antirust pigments, of which matting agents accounted for 55.08% of the income in 2021. Because of its excellent performance, silica can be widely used in paint, ink, plastic, petrochemical and other industries. The company's end customers are distributed in wood, furniture, photovoltaic, medical film and other fields. Over the years, it has established cooperative relations with a number of well-known enterprises at home and abroad. From 2019 to 2021, the company realized operating income of 333 million yuan, 350 million yuan and 409 million yuan, an increase of 5.29% and 16.86% over the same period last year. The net profit after deducting non-return was 60.0464 million yuan, 73.2678 million yuan and 7672.18 yuan, up 22.02% and 4.71% respectively.
With many low-end products in the industry, the company has obvious advantages in import substitution. At present, there is an overall overcapacity of low-end products and a shortage of high-end products in China's precipitated silica market. After long-term product research and development and continuous optimization of production technology and technology, the company has formed a unique production technology, and developed matting agents, adsorbents and other products with independent intellectual property rights, which are equal to foreign leaders in terms of performance parameters. successfully broke the monopoly pattern of foreign enterprises in related fields, and has gradually replaced some imported products in the domestic middle and high-end market. In 2020, the company's comprehensive strength and supply ranked first among domestic coating silica enterprises, and the sales volume of extinction products ranked first in the country. According to the company's prospectus, the company's matting agent products accounted for 12.81% of the Asia-Pacific market in 2021.
The new "annual output of 20,000 tons of ultra-fine silica aerogel series project" has been gradually put into production, laying the foundation for future performance growth. The funds raised by the company's IPO will be used for two projects: 1) the project with an annual output of 20,000 tons of ultra-fine silica aerogel series. The project has been under construction for two years, and the total annual profit is expected to increase by 108 million yuan after it is put into production. 2) R & D center construction project, the company attaches importance to technology research and development, through this project can constantly enhance the company's R & D strength and innovation strength.
Profit forecast and investment rating. We estimate that the return net profit of the company from 2022 to 2024 is 96 million yuan, 135 million yuan and 165 million yuan respectively, and the corresponding EPS is 0.88,1.25,1.52 yuan per share respectively. With reference to the comparable company valuation, considering that the company is an industry leader, leading in technology and market position, and has the advantage of import substitution compared with other companies, a certain valuation premium is given. We give the company 35 times PE in 2023, corresponding to the target price of 43.75 yuan, and give it a "better than the market" rating for the first time.
Risk hint. The price of raw materials fluctuates, the project production schedule is not as expected, and the macroeconomic fluctuation.