Continue to promote the collaborative development of the two main businesses. The company was founded in 2006. Its main products are easy-to-open metal packaging for food, beverages, and daily necessities, and is a leader in the field of easy opening in China. In 2023, a subsidiary of Jiangsu Yinglian Composite Fluid Collector will be established. In the future, it will continue to promote the collaborative development of the metal packaging products sector and the composite fluid collector sector and implement the “dual main business” driving strategy.

The main business grew steadily. The company's production capacity for easy-to-open lids will continue to expand, and sales are expected to grow steadily. In 2017-2022, the CAGR for sales of dry powder easy to open, canned goods, and easy to open beverages reached 20.6%, 28.8% and 43.1% respectively. The penetration rate of canned food, beer cans, etc. in China is far lower than that of the world, and the market space is broad.

Composite collectors are expected to become the second growth curve. Main advantages of composite copper foil: 1) Increased energy density. The energy density of ternary cells and battery systems is 250wh/kg and 200wh/kg respectively. If composite foil is used to replace traditional copper foil and aluminum foil, cell energy density and battery system energy density can be increased by 11.2% and 8.8%, respectively; 2) Production costs can be reduced. The theoretical reduction in material costs is about 65% and 75%, which will be clearly reflected after the industry matures; 3) Improving cell safety. The company is holding high. The composite foil project is expected to invest 3.089 billion yuan in 2023-2026, and plans to build 134 composite copper foil and 10 composite aluminum foil production lines. According to the company's estimates, the total project will generate annual revenue of more than 3.6 billion yuan (tax included) after delivery.

Investment advice: In the next few years, the company will form two main businesses: easy to open lid and composite foil. Considering that the industrialization of composite foil has now made significant progress, we believe that composite aluminum foil will be the first to be shipped in batches. As one of the few companies in the industry that simultaneously lays out composite copper foil and composite aluminum foil, the company will be the first to benefit. We expect the company's traditional business to resume steady growth, and the composite foil business to expand rapidly and become the second growth curve. It is predicted that in 2024-2026, the company's net profit to mother will be 0.032, 0.039, and 0.048 billion yuan, respectively, and the corresponding PE will be 89.1, 74.4, and 60.3, respectively, maintaining a “buy-A” rating.

Risk warning: Composite foil progress falls short of expectations; FMCG market demand falls short of expectations; market competition intensifies; production capacity release falls short of expectations.