Core views:
The company released its 2024 quarterly report. 2024Q1 achieved revenue of 835 million yuan, a year-on-year increase of 6.34%, net profit to mother of 86 million yuan, an increase of 10.86% year-on-year, and net profit after deducting non-return to mother of 81 million yuan, an increase of 5.50% year-on-year. The overall operating performance of the 24Q1 company was stable. The year-on-year growth rate of revenue and net profit to mother rebounded from 23Q4. Downstream customer demand remained resilient, and the company's color printing business is expected to remain stable; production capacity in the film business is gradually released, resulting in increased revenue, and profitability is expected to improve steadily; and the steady expansion of overseas markets is expected to form a business highlight.
24Q1 gross margin declined somewhat, and cost control was effective. 24Q1 achieved a gross profit margin of 22.06%, a year-on-year decrease of 2.36pct, and a month-on-month decrease of 2.19pct. Crude oil futures settlement prices have rebounded since 24, and the prices of the company's main raw materials are relatively stable. In terms of expenses, 24Q1 sales/management/R&D/finance expense ratios were 2.08/4.53/4.35/ -0.09%, respectively, with year-on-year changes of -0.1/-0.4/+0.01/-0.1 pct, respectively. The 24Q1 company's cost side control was good.
It is planned to invest in the construction of a 40,000 ton color printing composite flexible packaging smart factory project. The company's production expansion is progressing steadily. On March 22, it was announced that it plans to invest 445 million yuan to build a smart factory project with an annual output of 40,000 tons of color printing composite flexible packaging materials. The project designs 10 color printing production lines, including 6 new purchases and 4 relocation from the company headquarters. The project is expected to increase revenue of 629 million yuan and annual profit of 99.7 million yuan after completion and delivery. Smart factories promote the upgrading of the digital, high-end and green industries, expand the market to consolidate the company's share and enhance core competitiveness.
Profit forecasting and investment advice. The company is a leader in plastic flexible packaging and is actively expanding its film business. The company's net profit is estimated to be 4.7/54/61 billion yuan in 24-26 years. Demand from the company's downstream consumer industry is stable, and the leader in environmentally friendly and recyclable development is expected to benefit from the centralized development of the industry. The company has a steady business style, continues to pay high dividends to shareholders, and has broad room for growth brought about by capacity expansion, product structure upgrades, and overseas business expansion for a long time. It maintains a judgment on the company's reasonable value of 11.57 yuan/share, corresponding to the 24-year PE valuation 15 times, maintaining a “buy” rating.
Risk warning. Macroeconomic downturn demand falls, raw material prices fluctuate, competition intensifies, etc.