Event: the company issued a 2022 performance forecast. In 2022, the company expects revenue of 450-600 million yuan, a decrease of 27.30% over the same period last year; net profit of-3500 to-25 million yuan, loss of 91.48% and 93.91% year-on-year; deduction of non-net profit of-4000 to-30 million yuan, loss of 90.18% and 92.63% year-on-year.
The loss has been greatly narrowed, and the effect of cost control is obvious: 1) under the influence of epidemic control, fluctuation of raw material prices, operation and resource optimization and integration costs, the growth rate of downstream demand has slowed down, resulting in the company's net profit still showing a loss in 2022, but the extent of net profit loss has narrowed significantly. 2) the company's paint sector business is gradually stable and developing for the better, without provision for impairment of goodwill, basically getting rid of the negative impact of impairment of goodwill from 2020 to 2021, and the risk of further impairment is expected to be lower. 3) the company is currently in the adjustment period of internal industry and resource integration. Due to factors such as multi-base operation, resource and personnel allocation adjustment, product optimization adjustment and so on, the production cost and period expenses have increased to a certain extent. However, by improving the comprehensive management capacity, optimizing the allocation of resources and reducing expenses, the company's expense rate during the reporting period is still significantly reduced under revenue and pressure. In the first three quarters of 2022, the company's expense rate has decreased by 3.96pcts compared with the same period last year, laying the foundation for the company's performance release after the business reversal.
Research and development investment in high value-added areas represented by photovoltaic is expected to be gradually realized: in January 2023, Longji announced that the annual 15GW single crystal high-efficiency single crystal cell project that will be used to introduce HPBC battery technology will be changed to 29GW, indicating that the company's market demand for photovoltaic insulating adhesive products is gradually being realized, and the subsequent promotion of copper plating process will also help the company to realize photovoltaic products. The company's FPD photoresist, new energy automotive coatings and other products are also gradually tested in the market, and are expected to benefit from the cycle changes of the electronics industry and the development of domestic automotive coatings industry brought about by the new energy automotive industry.
The company is stepping up the construction of Jiangxi Guangzhen New Base: the company's main new and old products are photosensitive materials, the main difference lies in the field of application and product parameters, except that some products have higher environmental requirements for dust-free cleanliness and yellow light in the production workshop, most production facilities and public facilities can be used in general. According to the actual demand, the company can adjust the production line and expand production on the original infrastructure equipment to meet the changes in the downstream market. The company is stepping up the construction of Jiangxi Guangzhen base with an annual output of 50,000 tons of electronic photosensitive materials and supporting materials. According to the construction plan and the current construction progress, it is expected that some products will reach the production conditions of trial production in 2023.
Investment advice: although the company is currently in a trough, the commissioning of the new base is expected to effectively improve the company's operating conditions. We estimate that the company's operating income from 2023 to 2024 is 7.72 yuan and 1.094 billion yuan respectively, the return net profit is 0.66 yuan and 179 million yuan respectively, and the EPS is 0.34 yuan and 0.92 yuan respectively. Maintain a "buy" rating.
Risk tips: intensified market competition, new product research and development and application are not as expected, self-made resin materials are not as expected.