Annual report: Haishun Xincai achieved operating income of 714 million yuan in 2020, YoY+14.94%; return net profit of 103 million yuan, YoY+53.64%; deducted non-return net profit of 100 million yuan, YoY+58.35%. In the fourth quarter alone, the company achieved operating income of 220 million yuan, YoY+34.24%; net profit of 30.4 million yuan, YoY+102.67%; deduction of non-return net profit of 30.9 million yuan, YoY+77.18%. The company's performance is basically in line with expectations.
The company income continues the high growth trend: the company income continues the good growth trend, the single quarter operating income YoY+34.24%, increases significantly compared with the previous quarter. 1) continuous volume of major customer orders: according to industry research, under the policy of "4-7 volume procurement", more than 100 customers of companies have won the bid, and the cooperation between the company and downstream customers has been deepened under the "related review" system, and related orders have increased rapidly. For example, according to the annual report, the major contract order signed between the company and Huahai has been implemented in 2020 (a total of 53 million yuan, with a progress of 22%); 2) the R & D strength is strong, and the revenue source of new products is broadened: 12 new patents have been added throughout the year. The development of multi-layer co-extruded heat sealing film, breathable and waterproof film and other new products effectively broaden the source of income; 3) the company confirmed that Jiucheng packaging investment income of 19.52 million yuan (16.8512 million yuan in 2019).
The results of subsidiary integration are beginning to appear and turn losses into profits: Q4 company's gross profit margin is 35.63%, up 6.04 pct from the same period last year; net profit rate is 13.99%, which is 5.65pct higher than the same period last year. Mainly because the effect of subsidiary integration has been achieved and production efficiency has improved, 2020H2 has ushered in a profit inflection point: Suzhou Haishun net interest rate increased 2.66pct to 18.75% year-on-year, Suzhou Qingyi net interest rate increased to 9.59% year-on-year, Zhejiang Duoling and Shijiazhuang Zhonghui turned losses into profits, with net interest rates reaching 5.93% and 6.41% respectively.
The reason why the increase in the net profit margin in the fourth quarter was weaker than the gross margin was that the company invested heavily in business promotion fees and business hospitality fees, and the sales expense rate increased by 2.39pct to 8.37%.
Investment advice: the company's profit inflection point has arrived, the management plans in advance to continue to promote the construction of new capacity, the company is expected to maintain a good state of development. It is estimated that from 2021 to 2023, the EPS of the company will be 0.92, 1.27, 1.82 yuan respectively, maintaining the buy-An investment rating.
Risk hint: the increase of concentration is not as expected, and the volume of new products is not as expected.
