Event: the company disclosed its annual report that during the reporting period, the income reached 13.837 billion yuan, an increase of 564.29% over the same period last year, the net profit of 7.007 billion yuan, an increase of 3829.56% over the same period last year, and a net profit of 7.006 billion yuan, an increase of 4045.04% over the same period last year. Basic earnings per share 21.98 yuan, the performance is in line with market expectations. At the same time, the company announced the profit distribution plan for 2020, which intends to distribute a cash dividend of 30.00 yuan (including tax) to all shareholders for every 10 shares, and use the capital accumulation fund to increase 5 shares for every 10 shares for all shareholders.
Comments:
In 2020, Q4 net profit and cash flow reached new highs, and both volume and price rose rapidly. The company's 2020Q4 net profit reached another record high in a single quarter, achieving a net profit of 2.634 billion yuan, an increase of 4913.39% over the same period last year and 7.47% over the same period last year. The net profit after deducting non-return was 2.636 billion yuan, an increase of 5731.30% over the same period last year and 7.71% over the same period last year. The net cash flow generated by operating activities reached 3.422 billion, an increase of 1462.14% and a month-on-month increase of 32.33%. The ratio of operating cash flow to return net profit is significantly greater than 1, and the operation quality is good. In the stage of better control of the domestic epidemic situation, the company still maintained the trend of rising volume and price, and the overall gross profit margin of the medical device business for the whole year reached 69.03%. In addition, the company's exchange losses reached 280 million in 2020, and the profits will be even higher if the exchange gains and losses are not taken into account.
With the acceleration of production capacity, it is about to become the largest glove supplier in the world. During the reporting period, the company focused on the construction of Anhui Huaibei glove production base, and the company's disposable glove production capacity increased from 19 billion in 2019 to 36 billion by the end of 2020. According to the Frost Sullivan report, the company is the largest supplier of disposable gloves in China and the second largest supplier of disposable gloves in the world in terms of operating income in the first half of 2020. The company is the largest supplier of disposable gloves in China and the third largest in the world. The company will accelerate production expansion from 2021 to 2022. The company plans to build a number of low-cost production bases within five years, and promote an annual production project of 6.184 billion high-end medical gloves in Anhui. The total production capacity in 2021 / 2022 is expected to exceed 800 / 130 billion units respectively. In the long run, the company has the advantages of equipment integration, technology research and development, location cost and other advantages, is the absolute leader of domestic high-end nitrile gloves, and is expected to become the world's leading supplier of high-end medical gloves.
Earnings forecast, valuation and rating: the company's 2021 performance is expected to accelerate growth driven by the acceleration of production capacity and the normalization of epidemic protection. Considering the accelerated production progress of the company, the low production expansion efficiency of competitors such as Malaysia, and the price of gloves is expected to maintain a high shock, the company's EPS forecast for 2021-22 is 46.06 yuan / 48.55 yuan, and the company's 2023 EPS forecast is 34.34 yuan. The current price corresponding to 2021-23 PE is 4-4-6 times. Maintain a "buy" rating.
Risk tips: delayed production capacity; rising prices of raw materials; domestic demand is not up to expectations; exchange rate risk and so on.
