Key points of investment:
It started overseas and is deeply tied to well-known downstream customers. The company was founded in 2009 and is a leading domestic enterprise in plastic products and biodegradable plastic modification technology. Since its establishment, the company has focused on plastic products for daily use, and has established in-depth cooperation with famous supermarkets Morrison, Tesco, ASDA, Jarden, Walmart, and Costco in the UK and the US.
Deeply involved in PLA modification technology, plastic restriction policies drive demand-side prosperity, and the company continues to improve.
The company focuses on the research and development of PLA modification technology and the application of environmentally friendly degradable materials in the field of plastic products. The company has successively broken through technology to improve the heat resistance and durability of polylactic acid, solved the problem of poor foaming performance of PLA, improved its toughness and ductility, and achieved breakthroughs in injection molding and blister production processes. Currently, biodegradable plastic products have been put on the market. The energy crisis and environmental protection have placed new demands on the plastics industry, and plastic raw materials have also begun to transition from plasticity to degradability. The company has a clear leading edge in biodegradable plastic products, and the company continues to seize new development opportunities in the industry.
Strong product strength is compounded by channel reputation, and the company's overall performance is resilient. The products of the cooperative company have been trusted by customers for many years. The company has an independent R&D and testing center, and a technical R&D team of over 100 people, which can quickly meet the needs of different customers for different products. Strong product strength empowers the company's channel stickiness. After years of accumulation, the company's channel stickiness is strong, and the channel advantage is not easily shaken by the price advantages of other industry participants. Affected by the epidemic in recent years, raw material costs have remained high, import and export policies in various countries have limited the company's overseas market business growth rate, and the company's overseas business growth is slowing down. Currently, with the improvement of the global epidemic and the relaxation of cross-border trade restrictions, the company's rubber and plastic products business has now recovered.
Profit forecast and investment advice: The company's net profit is expected to reach 0.52/1.54/189 million yuan in 23-25, up -71%/195%/22% year-on-year respectively. The policy is facing stricter restrictions on traditional plastic products, and the company has channel and technical advantages. Therefore, the company was given 26 times PE in 2024, corresponding to a target price of 20.88 yuan, which covered the company's “buy” rating for the first time.
Risk warning: risk that overseas demand recovery falls short of expectations; production capacity investment falls short of expectations; fluctuation in raw material prices; exchange rate risk; risk of negative impact of poor performance on valuation premiums; risk of market competition.