Event description
On March 25, the company released its 2020 annual report. It is reported that in 2020, the company achieved revenue of 4.422 billion yuan, an increase of 61.67% over the same period last year; net profit of 855 million yuan, an increase of 414.51% over the same period last year; net profit of 773 million yuan, an increase of 405.78% over the same period last year; weighted average ROE of 56.42, an increase of 40.03% over the same period last year; and net cash flow of operating activities of 860 million yuan, an increase of 357.86%. The R & D expenditure was 182 million yuan, an increase of 83.69% over the same period last year; the R & D expenditure rate was 4.11%, an increase of 0.49% over the same period last year; and the cash paid for the purchase and construction of fixed assets, intangible assets and long-term assets was 188 million yuan, an increase of 147.25% over the same period last year.
Modified plastic plate: melt blown material contributes greatly and its performance increases obviously.
The company has been in the field of modified plastics for more than 20 years and ranks first in the domestic modified plastics industry. its products include reinforced and toughened modified plastics, high gloss modified plastics, flame retardant modified plastics and melt blown materials.
In the case of the epidemic leading to a great increase in the demand for epidemic prevention, the company actively changed production and expanded capacity. The annual revenue of the sector reached 3.578 billion yuan, an increase of 80.16% over the same period last year. Revenue accounted for 80.91%; the gross profit was 1.073 billion yuan, an increase of 281.85% over the same period last year; and the gross profit margin was 30%, an increase of 15.83% over the same period last year.
The development of plastic modification is relatively late in our country. In 2004, the modification rate of plastics in China was only 8%. In 2011, it was about 11%, and by 2019, the modification rate of plastics in China exceeded 20%. However, there is still a big gap compared with the global plastic modification rate of 48%.
There is a lot of room for modified plastics in the future. taking the lightweight demand of cars as an example, the average 1kg plastic can replace heavy materials such as 2-3kg steel, and every 10% reduction in vehicle weight can save fuel consumption by 6-8%.
According to the research of relevant institutions, the amount of modified plastics used in automobiles in developed countries is up to 200kg/, while that in China is 130kg/. The development of superimposed new energy vehicles puts forward more requirements for lightweight materials, and the growth space of modified plastics in the automotive industry alone will be very obvious. At present, the company has a production capacity of 300,000 tons / year of modified plastics, and another 120,000 tons / year is expected to be put into production in the second half of 2022 and the 100,000 tons / year project is in the feasibility research stage. If the company's capacity of modified plastics reaches 520,000 tons / year after full production, theoretically, it can bring a profit of 350 million yuan for the company.
Thermoplastic elastomer plate: TPV faucet built three major platforms, capacity planning multi-company thermoplastic elastomer business currently forms three major production platforms: dynamic vulcanization platform, esterification synthesis platform, hydrogenation platform. Dynamic vulcanization platform produces TPV, TPIIRHE and DVA, esterification platform produces TPU and TPEE, and hydrogenation platform produces HNBR. TPV is the main product. In 2006, the company broke the monopoly of AES of the United States, DSM of the Netherlands and Mitsui of Japan, established the first domestic TPV production line with independent intellectual property rights, and became the first domestic enterprise to use completely pre-dispersed-dynamic full vulcanization technology to produce TPV.
In 2020, the company's thermoplastic elastomer plate achieved revenue of 426 million yuan, an increase of 7.85% over the same period last year.
Revenue accounted for 9.63%; gross profit reached 170 million yuan, an increase of 25.93% over the same period last year; and gross profit margin was 40%, up 5.81% over the same period last year.
According to a report by Grand View Research of the United States, China's TPV market exceeded US $170 million in 2015, of which the automotive TPV market was about US $104 million. It is expected that the average annual compound growth rate of China's TPV market will be 10.9% in the next 9 years. In 2024, China's TPV market is expected to exceed US $430 million.
At present, the company has a thermoplastic elastomer production capacity of 35,000 tons / year.
In the future, the company's main planned production capacity is 100,000 tons / year TPU, which can theoretically bring a profit of 350 million yuan for the company.
Color masterbatch plate: steady growth of market space
The company's color masterbatch business has grown steadily and is the largest color masterbatch factory in Jiangbei. In the first half of the year, we actively adjusted the product structure, focusing on the development of chemical fiber masterbatch, black masterbatch and degradable masterbatch, which were recognized by customers. In-depth development of Haier, Hisense and other old customers, provide high-quality stable masterbatch, at the same time actively adopt business and technical integration, accurate understanding of customer needs, new customer development, color masterbatch sales have increased steadily.
According to the global market report on plastic masterbatch released by the German consulting company Ceresana, in 2016, the global consumption of plastic masterbatch was more than 4 million tons, of which the Asia-Pacific region color masterbatch market accounted for 40% of the global color masterbatch market demand. It is expected that by 2024, the global color masterbatch market will grow at an annual rate of 3.7%.
2020H1's color masterbatch business segment achieved an operating income of 93 million yuan, a decrease of 19.38% over the same period last year, and a gross profit margin of 23.1%, an increase of 4.41% over the same period last year. In 2020, the company's color masterbatch plate achieved revenue of 222 million yuan, an increase of 21.31% over the same period last year. Revenue accounted for 5.02%; realized gross profit was 56 million yuan, an increase of 64.71% over the same period last year; and gross profit margin was 25%, up 6.62% over the same period last year. By virtue of its technological innovation ability of color masterbatch, Qingdao Runxing is recognized as Qingdao high-tech enterprise, Qingdao innovative enterprise and Qingdao enterprise technology center.
Investment suggestion
It is estimated that the company's net profit from 2021 to 2023 will be 5.74,8.93 and 1.088 billion yuan respectively, with year-on-year growth rates of-32.8%, 55.4% and 21.9%. The corresponding PE were 14.81,9.53,7.82 times respectively. For the first time, coverage gives a "buy" rating.
Risk hint
Project construction is not as expected; raw material prices are rising; product prices are falling sharply; core technology and brain drain; market demand is not as expected.