Main points of investment:
Focus on the core strategy of polymer waterproofing, the competitive advantage is obvious. With polymer waterproof materials as the core product strategy, the company has rapidly formed a differentiated competitive advantage in the waterproofing industry. At present, Karen Polymer Industrial Park is the largest polymer coil production base in China, and the company has three advantages in technology, equipment and products in the field of polymer waterproofing.
The policy is favorable for the price of superimposed raw materials to fall, and the performance of the waterproofing industry is expected to improve. (1) the real estate policy continues to be optimized, and the "three arrows" in November 2022 marks a landmark change in real estate policy and an improvement in the real estate market, which is expected to boost the demand for waterproof materials. (2) the epidemic prevention and control policy has been continuously optimized. Since November 2022, the epidemic prevention and control policy has been continuously optimized, which is conducive to accelerating the recovery and development of consumption in key areas, promoting the overall improvement of economic operation, and also leading to a rebound in the demand for waterproof materials. (3) the landing of the new waterproofing regulations is expected to lead the industry to expand its capacity by more than 50%, and at the same time increase market concentration. (4) with the decline in the price of crude oil, the price of asphalt, as the main raw material of waterproofing material, has dropped, leading to an increase in the gross profit margin of the industry. The rebound in demand brought about by the three positive policies and the increase in gross profit margin brought about by the fall in asphalt prices, the performance of the waterproofing industry is expected to improve.
Adjust the business structure to achieve strategic transformation. The company actively adjusts the customer structure and product structure in order to reduce risk and improve the scale and quality of income. (1) Polymer waterproof materials are expected to become the most beneficial products in the new waterproofing regulations, and the differentiation strategy in the polymer field also gives the company a first-mover advantage. The company plans to account for 50% of the company's sales revenue by 2024, which will lead to the improvement of revenue scale and profitability. (2) the company makes great efforts to expand its dealer customers and plans to expand the number of dealers to 3000 in the next three years, which is expected to improve the scale and quality of revenue. (3) the company takes the initiative to reduce real estate revenue, reduce the orders of risky real estate customers, and actively expand municipal and infrastructure projects to ensure the quality of income.
Profit forecast and investment rating. We estimate that the company's net profit from 2022 to 2024 will be 41 million yuan, 131 million yuan and 234 million yuan respectively, corresponding to 0.11,0.34,0.61 yuan for EPS and 137X, 42.54X and 23.71x for PE, respectively, maintaining the "buy" rating.
Risk hints: intensified competition in the industry; rising prices of raw materials; the promotion effect of polymer materials is not as expected; the repeated impact of the epidemic on the economy; adverse changes in industry policies; risks brought by fluctuations in the real estate industry