Introduction to this report:
Global bulletproof demand continues to increase. As a leading enterprise in the high-strength PE - non-woven fabric - bulletproof products industry chain, the company's production capacity expansion continues to be implemented, the quality of bulletproof products is continuously upgraded, and its competitive advantage is outstanding.
Key points of investment:
Maintain an “increase in holdings” rating. Due to the accelerated release of the company's production capacity, the 2023/24 EPS was maintained at 1.24/1.86 yuan respectively, and the 2025 EPS was added at 2.24 yuan. As global demand for bulletproof products continues to increase, the company is a leading enterprise in the ultra-high-strength PE-weaveless fabric-bulletproof products industry chain. It has outstanding competitive advantages in all aspects, and maintains a target price of 37.2 yuan.
Demand for bulletproof products continues, and there are plenty of on-hand orders. The company achieved revenue of 616 million yuan in 2022, an increase of 86.26% over the previous year, Q4 was 158 million, a decrease of 10.23% from the previous month, achieved net profit of 171 million yuan, an increase of 226.25% over the previous year, Q4 was 0.37 million, a decrease of 37.29% from the previous month; net profit returned to the mother after deduction was 148 million, up 228.37% from the previous year, Q4 was 36 million, down 18.18% from the previous month. The decline was mainly due to the 22Q4 epidemic. The company has contracted debt of 105 million yuan, +407.55% over the same period last year, and there are plenty of orders on hand.
The volume and price of composite products have risen sharply, and the structure has improved markedly. The company's UHMWPE fiber revenue was 257 million yuan, +14.54% year on year, sales volume 2843.31 tons, -4.86% year on year, average price was 90,400 yuan/ton, +20.4% year on year, gross margin was 36.58%, +7.11 pcts year on year; composite revenue was 343 million yuan, +251.09% year on year, gross margin was 43.10% year on year, +4.43 pcts year on year, of which woolen cloth sold 718.26 tons, +198.59% year on year.
Production capacity continues to expand, and long-term growth can be expected. The company currently has 4,320 tons of high-strength PE fiber, with a production capacity of 4,240 tons; it currently has 800 tons of non-woven fabric and a production capacity of 2000 tons under construction. It is expected to be put into operation one after another in 2023-2024, and will continue to contribute increasing.
Risk warning: Market development falls short of expectations, raw material prices are rising