The company's 2023H1 net profit is-21 million yuan (year-on-year-113.57%), deducting non-parent net profit 42 million yuan (year-on-year-70.88%), of which 23Q2 net profit is-6 million yuan (year-on-year-106.64%, narrowing month-on-month loss), deducting non-home net profit of 54 million yuan (year-on-year-46.26%, month-on-month reversal). The loss is mainly due to increased foreign exchange losses. The company is a leading domestic tape enterprise, the sales revenue of major products has increased steadily, and the profitability of the second quarter has improved. We are optimistic about the long-term competitiveness of the company and maintain its "buy" rating.
Matters: on August 28, 2023, the company released its semi-annual report of 2023, with revenue of 2.583 billion yuan (year-on-year + 11.66%) and net profit of-21 million yuan (year-on-year-113.57%). Our comments are as follows:
The company's 2023H1 deducted non-parent net profit of 54 million yuan,-46.26% compared with the same period last year, higher than the median expected. 2023H1 realized revenue of 2.583 billion yuan (year-on-year + 11.66%), net profit of-21 million yuan (year-on-year-113.57%), higher than the expected median, and deducted non-return net profit of 54 million yuan (- 46.26%), higher than the expected median. From a quarterly point of view, 2023Q2 achieved income of 1.404 billion yuan (year-on-year + 13.30%, month-on-month + 19.07%), net profit of-6 million yuan (year-on-year-106.64%, narrowed month-on-month loss), and deduction of non-home net profit of 54 million yuan (year-on-year-46.26%, month-on-quarter turnaround). The loss in the second quarter was mainly due to the influence of the company's continuous rolling foreign exchange lock strategy, resulting in a large loss of foreign exchange lock. After deducting non-net profit for a single quarter, the company turned from loss to profit, and the company's business performance improved, and we expect the company's profit to continue to improve during the year.
The gross profit margin is higher than the previous month, and the influence of exchange fluctuation is obvious. 2023H1's comprehensive gross profit margin is 7.99%, year-on-year-3.57pcts. On a quarterly basis, the company's 23Q2 gross profit margin is 8.95%, year-on-year-2.11pcts, month-on-month + 2.10pct.
The period expense rate of 2023H1 is 5.88%, of which the sales / management / R & D / financial expense rates are 0.89% 1.69% 2.66% 0.65%, respectively, compared with the same period last year + 0.28/-0.02/-0.18/+1.99pcts. From a quarterly point of view, the expense rate of 23Q2 company is 4.14%, year-on-year + 2.88pcts, month-on-month-3.81pcts, sales / management / R & D / financial expense rate is 1.04%, 1.64%, 2.55%, and 1.09%, respectively, year-on-year + 0.49/-0.06/-0.17/+2.62pcts, month-on-month + 0.34/-0.11/-0.24/-3.80pcts. The change in financial expense rate is mainly due to the increase in exchange losses in the current period.
Further release of production capacity, supporting product sales growth. (1) Film-based tape: 2023Q2 achieved sales volume of 1.175 billion square meters, year-on-year + 50.00%, sales revenue of 580 million yuan, year-on-year + 5.96%, unit price of 0.49 yuan / square meter, year-on-year-30.00%. The decline in sales unit price is mainly caused by the change in the structure of film-based tape (an increase in the proportion of OPP tape) and the decline in the price of raw materials. (2) Paper-based tape: 2023Q2 achieved sales of 223 million square meters, year-on-year-1.69%, sales revenue of 581 million yuan, year-on-year + 5.96%, unit price of 1.43 yuan / square meter, year-on-year + 7.52%, mainly due to the continuous release of the company's new high-speed coating capacity of American pattern paper in 2022. (3) cloth-based tape:
2023Q2 achieved sales volume of 41 million square meters, year-on-year-4.46%, sales revenue of 136 million yuan, year-on-year-6.85%, unit price of 3.29 yuan / flat, year-on-year-2.66%. The decline in sales is mainly due to the decline in the price of raw materials. (4) OPP membrane: the production / sales volume of OPP membrane realized by 2023Q2 is 50 million tons, + 225.74% and 65.72% respectively, with a unit price of 7.88 yuan / kg and-18.43% compared with the same period last year. With the gradual development of the external sales business of OPP film, the company expects that the proportion of self-use of OPP film will continue to decline this year.
Tap the potential inside and expand the market outside, and continue to expand new areas. In 2023, under the guidance of "tapping the potential inside, expanding the market and precipitating the brand", the company continues to promote the cost reduction and efficiency of traditional products and the upgrading of product structure: the company's automotive wire harness belt project continues to advance, and the first phase of the biodegradable new materials project is expected to be completed in 2024H1. We are optimistic about the strategy of reducing cost and increasing efficiency of the company's traditional business + actively laying out high-end areas, and it is expected that the company's leading position in the domestic adhesive tape industry will be further strengthened.
Risk factors: raw material price fluctuation risk; exchange rate fluctuation risk; industry competition pattern aggravating risk; downstream demand growth is less than expected risk.
Investment advice: the impact of raw material prices is gradually weakening, the company's short-and medium-term traditional business continues to expand, medium-and long-term high-end projects are gradually landing, and the exchange impact is gradually declining. we are optimistic about the company's traditional business expansion advantage + active layout of high-end areas strategy, it is expected that the company's domestic adhesive tape industry leading position will be further strengthened, short-term performance is expected to be upward. Taking into account the increased competition in the industry as a whole and the exchange impact that has occurred in the company this year, we give the homing net profit forecast for 2023 to 2025 1.5 billion yuan, 250pm, 299 million yuan, corresponding to an EPS of 0.78, 1.31 and 1.57 yuan. At the same time, the company's performance this year is greatly affected by exchange gains and losses. We select 2024 performance to be valued: with reference to comparable company Stick / Sibao Technology / Huitian New Materials (comparable PE for 2024 is 18X 14max 12x, respectively), we give the company 2024 15xPE, corresponding to the target price of 20 yuan, maintaining a "buy" rating.