Events:
The company released its semi-annual report for 2022, with revenue of 676 million yuan, an increase of 51.28% over the same period last year, a net profit of 32.1395 million yuan, a decrease of 52.72%, and a non-return net profit of 22.0586 million yuan, an increase of 50.05% over the same period last year. In the second quarter alone, the operating income was 357 million yuan, up 60.85% over the same period last year; the net profit returned to the mother was 31.1194 million yuan, down 36.89% from the same period last year; and the non-return net profit was deducted from 22.6335 million yuan, up 1179.78% from the same period last year.
Comments:
1. A number of businesses have achieved steady growth, and profitability has significantly improved. 2022H1 achieved revenue of 240 million yuan, 323 million yuan, 40 million yuan and 56 million yuan respectively from hot melt adhesive, photovoltaic packaging film, hot melt wall cloth and curtains, an increase of-3.76%, 250.69%, 20.24% and 5.66% over the same period last year, among which photovoltaic packaging film, hot melt wall cloth and curtains increased significantly.
2022H1's gross profit margin was 19.22%, down 8.25% from the same period last year. 2022Q2 gross profit margin was 21.69% lower than the same period last year, but the month-on-month increase was 5.23pct. The overall gross profit margin decreased year on year, mainly due to the fluctuation of raw material prices. The cost of raw materials accounted for about 90% of the company's main products, solar packaging film, in which the price of EVA particles, the main raw material, has remained high since March 2021. Procurement prices rose 13.50% in the first half of 2022 compared with the same period last year The prices of other raw materials 1.4 butanediol, p-benzene and adipic acid rose 33.99%, 28.54% and 38.29% respectively over the same period last year, resulting in a large increase in gross profit margin. The repair of 2022Q2 gross profit margin compared with the previous quarter was mainly due to the company's increase in product prices and smooth transmission in the second quarter. The average selling prices of 2022H1 hot melt adhesive, photovoltaic packaging film and electronic adhesive increased by 13.51%, 18.62% and 8.68% respectively compared with the same period last year.
During the period of 2022H1, the expense rate decreased by 7.95pct to 13.36% compared with the same period last year, of which the sales expense rate, management expense rate and financial expense rate were 3.60%, 7.86% and 1.90% respectively, down 4.01pct, 3.15pct and 0.79pct from the same period last year. The net interest rate of 2022H1 after deducting non-return is 3.26%, which is down 0.03% from the same period last year. The net interest rate of deducting non-return from 2022Q2 is 6.34%, which is a substantial increase in 7.29pct compared with the same period last year.
2. The performance of photovoltaic packaging film business is outstanding, and the landing of production capacity has led to the rapid growth of 2022H1's photovoltaic packaging film business. In terms of production, the output in the first half of the year reached 2691.03 million square meters, an increase of 202.56 percent over the same period last year; sales volume reached 2536.60 million square meters, an increase of 195.70 percent over the same period last year, and the production and marketing rate reached 94.26 percent, continuing the booming trend of production and sales in the first quarter. From the price point of view, the average sales price of 2022Q2 increased by 16.32% month-on-month, effectively transmitting the adverse impact of the increase in raw material particles on costs. The gross profit margin of photovoltaic film reached 21.47% in the second quarter, an increase in 16.89pct compared with the first quarter.
From the upstream point of view, EVA particles are currently in a state of tight supply. In order to ensure the supply capacity, on the one hand, the company communicates with foreign suppliers who have always maintained cooperative relations to expand their supply share and reach a strategic cooperation agreement to lock the supply of particles; on the other hand, it has established procurement cooperation relations with domestic suppliers such as Sierbang, Lianhong Xinke, Zhejiang Petrochemical, Sinochem Quanzhou, etc., and constantly improve the domestic procurement share. 2022H1, the company's raw material inventory account value increased significantly, increased by 39.46% compared with the beginning of the period.
From the perspective of production and manufacturing, the company has completed the installation and testing of eight production lines of the Kunshan production base investment project in the first half of 2022, with an additional design capacity of about 67.2 million square meters; it is expected that the installation and testing of another six production lines will be completed in the third quarter, and the company will form an effective annual production capacity of about 160 million by the fourth quarter of 2022. At the same time, with the increase in production capacity and new equipment in place one after another, the company's overall manufacturing capacity continues to improve, 2022H1 photovoltaic packaging film unit labor cost dropped 0.04 yuan / square meter compared to the beginning of the year to 0.16 yuan / square meter, unit manufacturing cost dropped 0.19 yuan / square meter to 0.51 yuan / square meter compared with the beginning of the year, which is close to the leading level in the industry.
From the perspective of the downstream of the business, the photovoltaic module industry is still in a high state of prosperity, the company continues to increase the supply proportion of existing customers, and implements the major customer development strategy to accelerate the development of the top five customers in the industry. at present, the business negotiations, sample testing and batch supply of key customers are advancing in an orderly manner in accordance with the company's established plans.
Investment suggestion: the company's revenue in 2022-2024 is expected to be 2.269 billion yuan, 4.618 billion yuan and 6.19 billion yuan, the corresponding net profit is 139 million yuan, 292 million yuan and 407 million yuan, the corresponding EPS is 0.42,0.88,1.22 yuan respectively, and the dynamic price-to-earnings ratio in 2022-2024 is 33.3,15.8,11.4 times.
In view of the high demeanor of the company's business, maintain the "buy" rating.
Risk tips: 1) the new installed capacity of photovoltaic is not as expected; 2) the capacity release is not as expected; 3) the risk of raw material and energy price fluctuations.
