The high-speed growth of the national superfiber leader
Since listing, the company has always taken ultra-fine fiber and ultra-fiber leather as its main business, with a national market share of about 50%. Relying on the rapid development of the ultra-fiber leather industry, the company has achieved rapid growth in revenue and profit volume, with a compound revenue growth rate of nearly 20% in the past decade, and superfiber sales have gone from 6 million meters at the time of listing to 100 million meters now.
The permeability of ultra-fiber leather is increasing rapidly, and there is still a lot of market space.
Ultra-fine fiber PU synthetic leather, the full name of ultra-fine fiber synthetic leather, is a new material made of super-fiber non-woven impregnated modified polyurethane resin. The performance of the product is similar to that of dermis, far better than PVC synthetic leather and PU synthetic leather, and the product has good environmental protection performance, so it is the latest generation of synthetic leather material. The permeability of ultra-fiber leather has increased rapidly in the past few years, with the national market growing at about 25 per cent from 2013 to 2018, far exceeding the average growth rate of 6 per cent for synthetic leather products. At present, the penetration rate of ultra-fiber leather is still only about 5%. With the upgrading of consumption and stricter environmental protection, the market permeability of ultra-fiber leather is expected to maintain a rapid growth trend.
The company firmly occupies the leading position in the industry, and the road to growth is clear.
At present, the company has a production capacity of about 100 million meters (excluding new production capacity), with a national market share of about 50% and a global market share of 30%, firmly occupying a leading position in the industry. It can be said that the development history of Huafeng superfiber represents the development history of China's superfiber industry. Moreover, the company has an integrated industrial chain from resin and superfiber based cloth to veneer leather and suede leather, which is also ahead of its domestic counterparts. In addition, in terms of technology, the company expands its high value-added product system through new technology. In the later stage, with the gradual launch of the company's new production capacity, the company is expected to achieve a new round of growth through the continuous growth of the superfiber market.
In recent years, the high-end market space of ultra-fiber leather in automotive, women's wear and other fields has been continuously opened, and the gross profit margin of this kind of products is much higher than that of GM ultra-fiber leather. As a domestic brand, the company is competing with Japanese leaders in the high-end market and increasing its penetration, establishing at least three high-end brands including Antelope, MFL-nature, TOCCARE and so on. In 2019, Teska Huafeng (Shanghai) Automotive Technology Co., Ltd. was established as a joint venture with TESCA GROUP S.A.S. On the other hand, the company's performance is very flexible to the price of superfiber, and the rise in the price of raw materials at the end of the year has compressed the company's profit margin to a certain extent, while the company has raised the price of the whole product series three times since the Spring Festival, and the 21-year performance is expected to be released centrally.
Weifutong: performance hit bottom rebound, actively participated in the central bank digital RMB pilot Weifutong is the world's leading mobile payment integrated solution provider, mainly to banks, third-party payment companies, merchants, etc., to provide technology and marketing one-stop industry solutions, 2018-2019 by the "disconnected" impact, 2020 by the impact of the epidemic, performance decline and even trigger goodwill impairment, performance substantially hit bottom However, during this period, Weifutong continued to deepen its cooperation with banks, actively promoted close cooperation with UnionPay, and actively participated in the central bank's digital RMB pilot project, superimposed with the orderly recovery of merchant operations. Weifutong's profits have rebounded in the first quarter of 2021 compared with the same period last year, and Weifutong's business is expected to rebound in 2021.
It is estimated that the return net profit of the company in 2020, 2021 and 2022 is-3.44,5.93 and 739 million yuan respectively, of which the corresponding PE in 2021 and 2022 is 16.9,13.5 times respectively, covering for the first time and giving a "buy" rating.
Risk hint
The increase in the price of raw materials affects the profit margin of the company's products; the expansion of the automobile business is not as expected.
