Core views:
The company released its 2021 quarterly report, and its single-quarter revenue hit a new high since listing. The company achieved revenue of 596 million yuan in 21Q1, an increase of 53.41% over the previous year, achieved net profit of 74.72 million yuan, an increase of 137.70% over the previous year, and achieved net profit of 71.36 million yuan after deducting non-return mother's net profit of 71.36 million yuan, an increase of 147.66% over the previous year. Q1 Single quarter revenue hit a new high since listing. In terms of profitability, the company's overall gross profit margin in 21Q1 was 26.56%, an increase of 4.54 pct over the previous year, and the overall net profit margin was 14.01%, an increase of 5.36 pct over the previous year.
Sales of leading products increased sharply year over year, and product prices did not change much year over year. According to the company's operating data announcement, 21Q1 Yongu Yellow Series, Lysol Red Series, Yongu Red Series, Chromium Red Series, and Quinacridone Series achieved revenue increases of 58.6%, 46.7%, 53.8%, 47.3%, and 68.4%, respectively. Sales increased 65.4%, 47.3%, 52.7%, 40.5%, and 87.1%, respectively. Sales prices fluctuated by -4.1%, -0.4%, 0.7%, 4.9%, and -10.0%, respectively.
The 3,000-ton high-performance organic pigment project is expected to contribute to performance starting in 2021, and the sodium metal project is steadily recommended. The annual report shows that on December 27, 2020, the company carried out trial production of the 3,000-ton high-performance organic pigment project, which is expected to contribute incremental performance in 2021. In addition, the company's 20,000 tons of metallic sodium, 30,000 tons of liquid chlorine, and 35,000 tons of sodium hypochlorite projects are under construction. By the end of 2020, the cumulative project investment accounted for 40.70% of the budget.
Profit forecasts and investment recommendations. We expect the company's earnings per share in 21-23 to be 1.11 yuan, 1.38 yuan, and 1.51 yuan respectively. The price-earnings ratio corresponding to the current stock price is 15 times, 12 times, and 11 times. According to our forecast, the compound annual growth rate of the company's earnings per share in 21-23 is expected to be 22%. We maintain our judgment that the company's reasonable value is 24.52 yuan/share. The PE valuation of the corresponding company's earnings per share in 2021 is 22 times, maintaining the “increase in holdings” rating.
Risk warning. Prices of organic pigment products have fallen, and prices of raw materials have fluctuated greatly; downstream demand continues to be sluggish; progress of projects under construction falls short of expectations; and major safety and environmental incidents.