Introduction to this report:
The company's sales of easy-to-open dry powder declined in 2020, and revenue from canned food and beverage easy-open caps continued to grow. Looking at the long term, the company's research and development efforts for new, alienated products will be strengthened, internal and external expansion will accelerate industry integration, and order acquisition capabilities will continue to improve.
Key points of investment:
The target price was lowered to 9.18 yuan to maintain the increase in holdings rating. The company's 2020 performance is in line with expectations, but considering that milk powder is easily overshadowed by increased competition, the company increased its R&D efforts for differentiated new products, and R&D expenses increased. The 2021-2023 EPS was lowered to 0.52 (-0.17) /0.64 (-0.30) /0.79 yuan. The competitiveness of the company's products continues to improve and its ability to obtain orders is strong. Referring to peers, a certain valuation premium was given, 37 times PE was given in 2021, and the target price was lowered to 19.18 yuan to maintain the increase in holdings rating.
The performance was generally in line with expectations, with rising raw material prices and a slight decline in gross margin. In 2020, the company achieved revenue of 1,332 billion yuan, an increase of 13.82% over the same period, and achieved net profit of 77.613,500 yuan to the mother, a decrease of 2.68%.
In 2020, the prices of raw materials aluminum and tinplate rose unilaterally after bottoming out. The comprehensive gross margin fell slightly by 1.33 pct to 19.95%, and factors such as the continued depreciation of the US dollar caused certain fluctuations in operating performance.
Sales of dry powder that are easy to open have declined, and the revenue scale of canned food and beverages that are easy to open has continued to rise. As large milk powder can manufacturers built their own easy-to-open production lines to reduce the amount of outsourced production, the company's sales volume of easy to open cover products declined, but the rapid growth of snack food products offset some of the negative effects. Benefiting from years of expansion of production capacity and diversification of application fields, overseas purchases and domestic canned food production increased by 32.17%, and gross margin increased 5.19 pct to 32.15%; Yangzhou Yinglian's production capacity was completed and put into operation, and revenue increased 26.18%.
Research and development of new products for alienation has been strengthened, and internal repairs and external expansion have accelerated industry integration. With the maturing of production processes and supporting systems, Easy Tear Cover has expanded from the field of milk powder to snack food and other fields. The company's product specifications and models are becoming more and more perfect, and differentiated new product development efforts have been strengthened. Industry integration is accelerated through built-in production capacity and epitaxial mergers and acquisitions, enjoying global demand market space, and the orderly release of new production capacity will significantly improve performance.
Risk warning: risk of fluctuations in raw material prices, risk of mergers and acquisitions, risk of fluctuations in overseas demand