Ningbo Jialian Technology Co., Ltd. is a high-tech enterprise engaged in R&D, production and sales of plastic products and biodegradable products. As a leading enterprise in high-end plastic products and biodegradable products, the company has high product market recognition and high-quality downstream customers. The company's main products include tableware, durable household goods, etc., which are widely used in the fields of home, FMCG, catering, aviation, etc.; its cooperative customers cover many well-known domestic and foreign companies, including Amazon, Ikea, Walmart, KFC, Starbucks, SamsClub, Pizza Hut, Costco, Woolworths, Sysco, USFood, Safeway, Target, Loblaws, Tesco, etc., as well as foreign supermarket catering giants such as Hema Fresh, Little Sheep, Yoshinoya, Michelle, Darunfa, Medron, Europe Still waiting for the top domestic restaurant brands.
The plastic products and biodegradable material products industry is vast, and the importance of biodegradable plastic products is increasing.
China's overall production of daily-use plastic products has remained relatively stable. The CAGR from 2015 to 2021 was 2.9%, and it only accounted for 8.76% of the plastic products segment in 2021, with huge room for growth; the global production capacity of biodegradable plastics reached 1,142 thousand tons in 2022, which is the main growth point of the bioplastics circuit in recent years. As environmental protection policies in the plastics industry become stricter and the process of high-end greening, technologies and industries related to biodegradable plastics in China will develop rapidly, application scenarios will become richer, and their importance in the future development of the plastics industry will continue to increase. In terms of the competitive pattern, there are many enterprises in the daily-use plastic products industry in China. There are large differences in technology and scale, and the industry concentration is low, while the biodegradable material products industry is still in its infancy, and there are few market participants.
The company has strong technical and technological strength and leading advantages in the field of biodegradation. In terms of technical technology, the company's independent research and development focuses on improving the automation efficiency of customized product production processes, which can quickly respond to customer needs and control production costs. As domestic plastic restriction policies become stricter, the company has a first-mover advantage in the field of biodegradable materials. Currently, it has 27 biodegradable related patents. Biodegradable material products have passed mainstream certifications and tests such as US FDA tests, European EU tests, and national standard food safety tests, and has the production capacity to provide large quantities of high-quality products to major international supermarkets and famous restaurant chains. In addition, the company's brand has a high reputation in the international plastic products industry, forming strong customer and brand advantages.
The first coverage gave it a “Highly Recommended” investment rating. The company has leading production technology for high-end plastic products and biodegradable products, and maintains good cooperative relationships with many domestic and foreign catering and tea giants. As demand for major overseas customers replenish stocks and expand categories picks up, the export business is expected to recover; the rapid expansion of downstream tea customers and the continuous development of new customers will benefit the growing trend of domestic sales business in 2024. The company's net profit for 23-25 is estimated to be 51 million yuan, 145 million yuan, and 185 million yuan respectively, corresponding to a PE of 23.8x in 24.
Risk warning: the risk of RMB exchange rate fluctuations, the risk of a sharp increase in raw material costs, the risk of market competition, and the recovery in overseas business demand falling short of expectations.