In the first half of the year, revenue increased by 19.5% compared with the same period last year, and net profit increased by 2.9% compared with the same period last year. The company's 1H22 revenue is 178 million yuan (YoY + 19.5%), the net profit is 67 million yuan (YoY + 2.9%), the net profit is 56.74 million yuan (YoY + 17.3%), the 2Q22 revenue is 97.36 million yuan (YoY + 16.2%), the net profit is 38.51 million yuan (YoY + 21.6%), and the net profit is 33.15 million yuan (YoY + 22.5%). The steady growth of the company's performance is due to: 1) the counter-trend growth of the market share of the core customer Apple Inc; 2) the increase in the quantity and value of material numbers supplied by Apple Inc customers; and 3) the continuous improvement of the company's production capacity and order-taking capacity.
The gross profit margin remained above 60%, and revenue from electronic composite functional materials increased by 24.9% in the first half of the year compared with the same period last year. The company's 1H22 gross profit margin is 60.48% (YoY-2.01pct), the expense rate is 22.94% (YoY-2.01pct), and the non-return net interest rate is 31.85% (YoY-0.62pct). Under the influence of factors such as the increase in depreciation of fixed assets brought about by the IPO project, the increase in labor costs caused by team expansion, and the increase in logistics costs caused by the epidemic, the company's gross profit margin remains at a high level of more than 60%. From a business point of view, 1H22 electronic composite functional materials revenue 123 million yuan (YoY + 24.9%), optoelectronic display module materials revenue 11.05 million yuan (YoY + 132.4%), precision process Applied Materials Inc revenue 44.08 million yuan (YoY-3.7%).
Accelerate the certification of green materials such as bio-based materials and introduce them to the market. International well-known consumer electronics brands are carrying out bio-based alternatives to produce materials one after another. Apple Inc has made it clear that the goal of carbon neutralization is "net zero carbon emissions related to products by 2030". Increasing the content of recycled materials is one of the important means to achieve carbon neutralization; according to Apple Inc's 2021 Environmental Progress report, the proportion of recyclable and renewable resources used in its products has reached 18%. In addition, Mercedes-Benz, Audi, Toyota and other automobile manufacturers have released models that use biodegradable materials to prepare auto parts. The company attaches great importance to the development opportunities of bio-based functional materials, actively research and develop bio-based materials, accelerate the certification of bio-based materials and promote them to the market.
Release the fixed increase plan to raise funds for the new high efficiency sealant project and innovation center project. The company issued a pre-plan to issue A-shares to specific targets in 2022, raising a total of no more than 390 million yuan for new high-efficiency sealant projects, innovation center projects and supplementary liquidity. The new high-efficiency sealant project plans to invest 300 million yuan to build a 41200-ton high-efficiency sealant production platform for the fields of new energy vehicles, automotive electronics and consumer electronics; the project has a construction period of 3 years and an estimated after-tax profit of 160 million yuan after production.
The Innovation Center project, with a total investment of 320 million yuan, is built in Shanghai Zizhu High-tech Zone, which aims to build a world-class platform R & D system led by material scientists and enhance the company's ability of independent innovation.
Investment suggestion: we continue to be optimistic that the company will gradually become the first square of functional materials in the world by expanding production capacity, increasing research and development, and opening up new customers / new products / new fields. We expect the company's 22-24 year-on-year net profit to increase by 33.2%, 34.5%, 20.6% to 3.30pm, corresponding to a PE of 20.3, 15.1, 12.5 times, maintaining a "buy" rating.
Risk tips: consumer electronics demand is lower than expected; market competition is intensified; customer concentration is high.