Brief comment on performance
Wansheng released its 2021 annual report and quarterly report on April 30, 2022. The company achieved an operating income of 4.115 billion in 2021, an increase of 77.18% over the same period last year, and a net profit of 824 million, an increase of 109.67% over the same period last year. 1Q22 realized operating income of 890 million yuan, down 3.86% from the same period last year and 14.99% from the previous year; the net profit from the home was 129 million yuan, down 36.89% from the same period last year and 35.44% from the previous year.
Business analysis
Phosphorus series flame retardant short-term pressure, the company's performance has been slightly affected: the company has become the world's first production of organophosphorus series (halogen-free) flame retardant leader. According to the operating data disclosed by the company, the output of organophosphorus flame retardants in 2021 was 130900 tons, an increase of 37.14 percent over the same period last year; sales volume was 127600 tons, an increase of 33.19 percent over the same period last year; and the average sales price was 262,000 yuan per ton, up 41.79 percent over the same period last year. The volume and price of the main products have risen together, driving the company's performance in the past 21 years to grow substantially. Q1 in 2022, the company is subject to a sharp rise in the price of raw materials, the increase in the sales price of end products is not as high as that of raw materials, and the company's gross profit margin is under pressure. At the same time, or affected by the epidemic, terminal consumption was slightly affected. In 2022, the sales of phosphorus flame retardants in Q1 company was 25400 tons, down 22.32% from the same period last year, and the production and marketing rate was 87.02%, which was lower than that in 21 years.
Deep ploughing plus code main business, continue to expand the layout of the industrial chain. The Shandong project continues to advance, the main business continues to expand, and the products bloom at many points. The company's Shandong project plans a production capacity of 319300 tons of functional new materials, including 70,000 tons of phosphorus polyurethane flame retardants and 50,000 tons of phosphorus engineering plastics flame retardants (all BDP). The project will last for 18 months and is expected to be completed and put into production in the first half of 2023. At the same time, the company will layout the Zhongzhou project in Fujian and enter into lithium ion electrolyte additives and new conductive materials, which is expected to further enrich the layout of the company's terminal industrial chain.
Investment suggestion
The sales rhythm of the company and the prosperity of terminal consumption are disturbed by the epidemic and the cost of raw materials increases, the price transmission is not smooth, and the performance of the company is under pressure. In this scenario, we downgrade the company's profit forecast for 2022-2023, which is 45% and 47% lower than the previous value in 2022-2023, respectively. We expect the company's net profit to be 610 million yuan / 760 million yuan / 930 million yuan in 2022-2024, corresponding to 1.04 yuan / 760 million yuan / 930 million yuan in 2022-2024, and the PE multiple is 15.6X/12.5X/10.3X in 2022-2024, respectively, maintaining the "buy" rating.
Risk hint
1. The global growth of new energy vehicles is less than expected. The repeated epidemic situation has a negative impact on the rhythm of terminal consumption and transportation. The project approval and construction progress are not as good as expected. The risk of the influence of double control of energy consumption on operating rate
