Event: the company's 2022H1 realized an income of 143 million yuan, a drop of 57.17%, a net profit of 39 million yuan, a decrease of 62.37%, a deduction of non-net profit of 36 million yuan, and a drop of 64.56%.
In the first half of the year, due to the repeated epidemic situations at home and abroad and the instability of the international situation, the terminal demand for airtight materials decreased and the income declined. 2022Q2 achieved an income of 63 million yuan, a drop of 65.43%, and a net profit of 17 million yuan and a drop of 69.51%.
Comments:
The epidemic situation at home and abroad has been repeated, and the terminal market demand for airtight materials has declined. From a split point of view, 2022H1's income from airtight materials and flexible materials reached 100 million yuan and 37 million yuan, an increase of-65.75% and-5.13%, respectively. The decline in revenue was mainly due to repeated outbreaks at home and abroad and the instability of the international situation. The terminal market demand for airtight materials, the main products, decreased, resulting in a substantial decrease in sales of airtight materials compared with the same period last year.
The cost of raw materials and labor affects the gross profit margin, and the financial expense rate decreases compared with the same period last year. 1) 2022H1's gross profit margin also dropped to 31.19%, mainly due to the increase in raw material costs and labor costs of 22H1 compared with the same period last year, and the company's operating costs were under pressure. The gross profit margins of 22H1 airtight materials and flexible materials were reduced by 10.8PCT and 0.7PCT to 35.22% and 22.54%, respectively. 2) the rate of sales, management, R & D and financial expenses of 2022H1 increased by 0.80PCT, 1.90PCT, 2.20PCT and-7.09PCT to 1.40%, 4.90%, 4.90% and-7.69%. The company actively expanded its business while strengthening cost control, and the increase in exchange income and interest income led to a significant decrease in the rate of financial expenses.
3) the net cash flow of 2022H1's operating activities increased by 1316.18% to 59 million yuan, mainly due to a sharp decrease in the purchase of materials and semi-finished products compared with the same period last year.
The short-term industry development environment is expected to improve, and the company will enhance the competitiveness of the industry. The company's main products airtight materials and flexible materials are used in water skis, gymnastics mats, inflatable yachts and cover materials, light box advertising materials. The company has been ploughing the field of plastic composite production and R & D for many years, with outstanding product R & D and innovation ability, and has certain technical advantages. In addition, with a rich range of products, the company can provide customized services according to customer needs, and work with downstream customers to expand new product application areas, and continue to strengthen product recognition. With the improvement of the impact of the 22H2 epidemic, downstream customer orders are expected to resume growth, and the company's revenue growth is expected to pick up somewhat.
Profit forecast and investment advice: the epidemic situation and international instability affect the company's short-term income performance. We lower the company's 2022-2023 return net profit forecast of 1.16 billion yuan (the original value is 246 million million yuan), and forecast 24-year return net profit of 196 million yuan, the current stock price corresponds to 22 years 17.96 times PE. We believe that the company's dominant position in the industry is obvious, and terminal demand is expected to improve in the second half of the year, maintaining the "buy" rating.
Risk factors: COVID-19 epidemic spread risk, exchange rate fluctuation risk, raw material price fluctuation risk, Russia-Ukraine conflict risk and so on.