Key points of investment
Next Tuesday (****ere will be an inquiry for a GEM IPO “Zhonglun New Materials”.
Zhonglun New Materials (301565.SZ): The company is mainly engaged in R&D, production and sales of functional BOPA films, biodegradable BOPLA films and polyamide 6 (PA6) and other related material products. In 2021-2023, the company achieved operating income of 1,994 million yuan/2,297 million yuan/2.352 billion yuan respectively; YOY was 24.45%/15.21%/2.41%; realized net profit to mother of 298 million yuan/285 million yuan/206 million yuan, and YOY was 42.52%/-4.34%/-27.73% in that order. In the latest reporting period, 2024Q1 achieved operating income of 564 million yuan, a year-on-year increase of 18.66%, and net profit to mother of 55 million yuan, a year-on-year decrease of 16.81%. The company expects to achieve operating income of 1.12 billion yuan to 1.22 billion yuan in 2024H1, a year-on-year change of 3.20% to 12.41%; net profit to mother is expected to reach 100 million yuan to 130 million yuan, a year-on-year change of -14.37% to 11.32%.
Investment highlights: 1. The company is a global leader in BOPA film and is one of the few companies in the world with integrated production capacity in the industrial chain. Since its establishment, the company has been engaged in R&D, production and sales of PA6. After acquiring the downstream BOPA and BOPLA film manufacturer Changsu Industrial in December 2019, it extended its business to the downstream film industry. Currently, it is one of the few companies in the world with the advantage of integrating the complete “PA6-BOPA film” industry chain. The gross margin level of BOPA products is superior to that of its peers. With these advantages, the company has become a global leader in BOPA film. Currently, it has a BOPA film production capacity of nearly 120,000 tons/year. According to Zhuochuang News data, the global BOPA film market demand in 2023 is about 500,000 tons, and the company's production capacity is among the highest in the world; the subsidiary Changsu Industrial BOPA film products reached 20% of the global market share and 36% domestic market share in 2021-2023, leading the domestic functional BOPA film. 2. The company is the main domestic supplier of nylon layers for PHA lithium battery films, and is expected to benefit from the opportunities brought by the development of new energy vehicles and energy storage industries. PHA lithium battery film is mainly used in aluminum-plastic packaging film for soft-pack lithium batteries. It can be widely used in 3C electronics, new energy vehicles, energy storage, etc., and is one of the key products for future company development. As one of the key materials for lithium-ion soft-pack batteries, aluminum-plastic film is expected to benefit from increased demand driven by the development of new energy vehicles, energy storage and other industries. According to data from Toubao Research Institute, China's aluminum-plastic film market is expected to be about 6.50 billion yuan in 2020 and will grow to 10.960 billion yuan in 2023, with a compound annual growth rate of 21.90%. According to an explanation issued by the Battery Film Special Committee of the China Plastics Processing Industry Association, aluminum-plastic film technology requirements are high, and there is plenty of room for domestic replacement; the company is currently the main supplier of nylon layers for aluminum-plastic films other than Japanese manufacturers. The sales scale in 2023 is close to 100 million yuan, which is expected to benefit from the dual opportunities of domestic substitution and increased industry demand. 3. Segments with high demand for food preservation, such as prepared dishes and short-preservation foods, are developing rapidly, and the company's EHA fresh-locking film has broad room for growth. In recent years, categories such as prepared food and short shelf food (food with a shelf life of less than 7 days) have developed rapidly. According to Ai Media Consulting data, China's prepared food market size is 345.9 billion yuan in 2021, and the CAGR is expected to reach 25.39% between 2021 and 2026; the revenue of the short-warranty bread market in 2019 was about 17 billion yuan, and the CAGR from 2012 to 2019 was 18.96%; the rapid development of these short-warranty categories has increased the requirements for keeping food packaging fresh. The EHA fresh-locking film developed by the company has strong gas barrier properties and can guarantee food safety and fresh taste. It can be used for packaging of pastries, cheese, pet food, meat products, etc., as well as packaging of hot pot ingredients below 105°, and is expected to seize the explosive growth opportunities of short-shelf food.
Comparison of listed companies in the same industry: The company is mainly engaged in R&D, production and sales of BOPA films, so it chose Cangzhou Pearl and Foshan Technology, which are also engaged in BOPA film production, as well as Enjie Co., Ltd. and Guofeng New Materials, which are also in the rubber and plastic products industry, as comparable companies in Zhonglun New Materials. Looking at the comparable companies mentioned above, the average revenue scale (TTM) of the industry is 4.778 billion yuan, the comparable PE-TTM (excluding outliers and arithmetic average) is 20.20X, and the gross sales margin is 20.12%; in comparison, the company's revenue scale and gross sales margin are lower than the industry average.
Risk warning: There is still a possibility that companies that have begun the inquiry process will not be able to go public due to special reasons; company content is mainly based on the content of prospectus and other public information; there is a risk that the selection of listed companies in the same industry is not accurate enough; there may be interpretation deviations in the selection of content data. The specific risks of listed companies are shown in the text.