Quarterly report of 2021: the company's income in the first quarter of 2020 was 224 million yuan, and YoY+43.92%, increased by 36.93% over 2019Q1; the net profit of 33.59 million yuan was realized, and YoY+134.10%, increased by 92.58% compared with 2019Q1; after deducting 33.25 million yuan of net profit, YoY+141.68%, increased by 104.39% compared with 2019Q1. The performance is basically in line with expectations.
Downstream customer demand continues to expand, the company's production and sales are booming: reported that the company's revenue maintained rapid growth, 2021Q1 revenue growth rate reached 43.92% year-on-year, continuing the rapid growth of 2020Q4. According to the announcement, as of April 2021, the number of customers who had business relations with the company had reached 2000, including 70 per cent of the top 100 enterprises in China's pharmaceutical industry. Benefiting from the "volume purchasing" policy, downstream customer orders gradually increased, and the company achieved booming production and sales in the first quarter. The company took the initiative to screen and merge related orders. According to the investor relations activity record table, the target of medium and small orders in 2021 was reduced by 30% +. The work of centralized procurement and use of drugs continues to be promoted, and the company's customer structure is high-quality, which is expected to benefit from the promotion of collection work, and the scale of related orders is expected to increase. New products co-extruded film in the reporting period to achieve sales contribution income, with the continuous landing of the company's new products, the revenue scale is expected to continue to grow.
Profitability is still improving, and the expense rate has fallen sharply: 2021Q1's gross profit margin is 31.71%, up 1.54 pct from a year earlier, and 0.68pct higher than 2019Q1. Benefiting from the saturation of downstream orders, the company took the initiative to merge orders and released the scale effect. The operation of subsidiaries is gradually on the right track, and the improvement of performance leads to the improvement of overall efficiency.
During the first quarter, the expense rate was 13.97%, down 6.52 pct from the same period last year and 5.78 pct compared with 2019Q1. Among them, the sales expense rate was 5.35%, down 2.53 pct from the same period last year, and 2.98 pct lower than 2019Q1. Thanks to the company's deep digging of old customers to increase its internal share, customer development expenses were better controlled. The net interest rate per quarter is 15.28%, which is 5.94pct higher than the same period last year and achieves 5.00pct compared with 2019Q1.
The new project is expected to be gradually launched and is expected to ease capacity pressure: the company plans to issue no more than 46.96 million shares and no more than 30 per cent of its total share capital to no more than 35 specific investors. In this project, 5 recyclable high barrier composite production lines, 4 cold stamping high barrier composite hard sheet production lines and 20 multi-layer co-extruded high performance bottle-needle production lines are proposed. After completion, the company will further expand the production capacity of high barrier composite materials, establish product advantages and consolidate the company's core competitiveness. Looking to the future, the company will increase its production capacity by 18,000 tons per year after the project capacity has reached production capacity, an increase of nearly 70% over the total capacity at the end of 2020. In addition, according to the company announcement, the first phase of Nanxun project is expected to be put into production in 2021Q3, and the second phase of the project is expected to start construction in the middle of the year. The landing of new capacity is expected to effectively alleviate the pressure on the company's production capacity and lay the foundation for further revenue expansion.
Investment advice: the management of the company plans in advance to continuously promote the construction of new production capacity, and the profit level continues to improve. 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.
