According to the company's mid-2023 report, the company achieved 4.746 billion yuan in operating income in the first half of 2023, + 2.64% last year, 305 million yuan in net profit, + 30.99% in the same period last year, and 296 million yuan in non-net profit, + 28.35% in the same period last year. The company's packaging business has maintained steady growth and remarkable competitiveness. The company has advanced aluminum and plastic film technology, strong profitability and greatly increased shipments. The company's growth drivers are clear, maintain the "buy" rating, and continue to recommend.
Event: the company's income in the first half of 2023 was 4.746 billion yuan, + 2.64% compared with the same period last year; the net profit was 305 million yuan, + 30.99%; and the non-net profit was 296 million yuan, + 28.35% compared with the same period last year. In this regard, our comments are as follows:
2023H1's profit rose sharply and its gross profit margin improved. The company's 2023H1 deducted non-net profit of 296 million yuan, + 28.35% year-on-year, and gross profit margin of 22.10%, up 1.57% from the same period last year. The gross profit margin in the second quarter was 22.68%, up 1.31 percentage points from the same period last year and 1.22 percentage points higher than the previous quarter. We believe that the increase in gross profit margin is mainly due to the decrease in the cost of raw materials in the company compared with the same period last year, such as the price of PET chips-6.8% year-on-year-20.8% year-on-year, and the price of tinplate-17.4%.
Packaging business has made steady progress, continue to develop new products. In the first half of 2023, on the one hand, the company did a good job in product research and development, project optimization, completed the product promotion of many sets of bottle blank mold and bottle blowing mold, and realized the production of two sets of aseptic production lines. implement a number of product research and development projects, such as bee flower 1L bottle and bottle preform industrialization, Yibao 23.5g weight gain billet, etc.; on the other hand, do a good job in quality control, reduce costs, save energy consumption, and achieve double growth of sales and profits.
In the first half of 2023, sales of PET bottles and bottle germs reached 854 million yuan, an increase of 4.3% over the same period last year, an increase of 2.148 billion PET bottles, an increase of 7.4%.
Aluminum and plastic film sales are growing rapidly, increasing customer exchanges. The subsidiary Zijiang New Materials seizes the development opportunity of new energy vehicles and energy storage market, continues to deepen the strategic cooperation of major customers, and realizes the rapid growth of business scale and asset scale. In the first half of 2023, the company sold 2558.41 million square meters of aluminum and plastic film, an increase of 41.98 percent over the same period last year, and the price per square meter was 14.8 yuan, down 10 percent from the whole of 2022. In recent years, Zijiang New Materials continues to expand and deepen cooperation with downstream flexible battery customers, strengthen technical exchanges with large lithium battery manufacturers, and improve the market share of their own products.
Risk factors: soft bag battery applications are not as expected; customer sales are not as expected; the company's new customer development is not as expected; competition is increasing (such as competitors breaking through technology and production bottlenecks); and the company's profitability is not as expected.
Investment suggestion: we maintain the company's 2023Universe 2024Company2025 net profit forecast of 7.02Universe 8.32 / 954 million yuan, corresponding to the current price of 20232024Universe 12-10-8 2025 times PE. Reference packaging enterprises comparable companies (Baosteel Packaging and Hexing Packaging) and lithium materials comparable companies (Mingguan new materials, Tianci materials) 2023 Wind consistent average valuation of 19 times PE, taking into account the slowdown in the aluminum and plastic film industry, give the company 2023 16 times PE valuation, target price 7 yuan, maintain the "buy" rating, continue to recommend.