Core ideas:
What happened: the company released its quarterly report. 2020Q1 achieved revenue of 172 million yuan, year-on-year + 25.38%, month-on-month + 7.04%; net profit of 31.2576 million yuan, + 11.24%, + 60.95%; revenue continued to grow in the first quarter of 2021, and net profit improved significantly.
The production and sales of wet electronic chemicals continued to grow month-on-month, and the profitability gradually improved. According to the company's annual report and operating data announcement, in the second half of 2020, the company added 34000 tons of TMAH developer production capacity, the current TMAH production capacity reached 90,000 tons. 21Q1's main function wet electronic chemicals production and sales were 22900 tons and 22500 tons respectively, compared with the fourth quarter + 10.94% and + 10.45%. The continuous growth of the production and marketing scale of the main products led to an increase in performance. The price of 20Q4 raw material dimethyl carbonate is a big drag on earnings. According to wind data, the average price of 20Q4 dimethyl carbonate rose to 11801 yuan / ton, while the average price of 21Q1 dimethyl carbonate fell back to 7897 yuan / ton. 20Q4-21Q1, the comprehensive gross profit margin increased from 21.44% to 25.69%, and the net profit margin increased from 12.09% to 18.18%.
In the construction capacity gradually released, horizontal expansion to enrich the product matrix. With the gradual expansion of production capacity of projects under construction, the company's competitiveness in the field of TMAH developer has been further enhanced. We believe that wet electronic chemical production has commonality and corresponding technical threshold, the company successfully introduced large panel and semiconductor manufacturers through TMAH developer, with first-mover advantage. The company and customers jointly developed CF developer, BOE etching solution and other products, related projects under construction steadily, with years of accumulation of core process Know-How, based on TMAH developer, is expected to achieve diversified expansion of product matrix.
Profit forecast and investment advice. It is estimated that the company's EPS in 21-22 will be 1.55x2.24 yuan per share respectively. With reference to the comparable company's average PE valuation in 2021, it will give the 2021 results 35 times the PE valuation level, corresponding to a reasonable value of 54.25 yuan per share, maintaining the "buy" rating.
Risk hint. Customers concentrate risk; fundraising project is less than expected risk; ownership structure risk; raw material price increases significantly.
