Event: the company released the three-quarter report of 2020: the operating income in the reporting period was 830 million yuan, + 14.79% compared with the same period last year; the net profit returned to the mother was 94 million yuan, + 67.24% compared with the same period last year; of which the operating income in the third quarter was 353 million yuan, + 37.29% year-on-year and + 0.42% compared with the same period last year; the net profit returned to the mother was 45 million yuan, + 78.53% year-on-year and-7.73% compared with the same period last year.
Main points:
1. With the rapid recovery of the construction market, the main products of the silicone sealant industry include silicone sealants, water-based sealants, other sealants, electronic adhesives, asphalt paints and water-based coatings, etc. Products are widely used in construction engineering, home decoration, container manufacturing, steel structure manufacturing, petrochemical equipment, ship yacht equipment, LED drive power supply, new energy vehicles, electronics and electrical and power transformers and other fields. Benefiting from the rapid warming of the construction market after the effective control of the epidemic, the increase of the collection scale of brand real estate developers, the accelerated growth of prefabricated buildings and other industry development factors, the company ploughed the central cities and major customers to increase market development efforts. Third quarter gross margin 38.18%, month-on-month + 0.45%; sales expense rate 12.57%, month-on-month + 2.32%; management expense rate 4.11%, month-on-month ratio-0.41%; financial expense rate 0.8%, month-on-month ratio + 0.3%.
two。 Real estate developers concentrate on purchasing, and the share of Longtou City continues to rise.
With the continuous improvement of the concentration of the real estate industry and the increase of the collection scale of the top 100 real estate enterprises, coupled with the fine decoration policy to strengthen the real estate collection space, the market and resources of various segments of consumer building materials continue to accelerate to first-tier brands. The company's silicone sealant products are located in the middle and high end market, and the top 100 real estate enterprises in China have successfully entered the brand library of more than 90 large real estate enterprises, including Vanke, Wanda, R & F Real Estate, China Resources Land and so on. The company has been awarded the top 3 sealant suppliers of the top 500 real estate development enterprises for six consecutive years, and the top ten preferred brands of construction glue for 15 years in a row. With strong product quality and professional technical service ability, the company through the brand designation of more large real estate enterprises to enhance the market share of silicone sealant products.
The company's silicone sealant increased from 410 million yuan in 2017 to 720 million yuan in 2019, with a compound annual growth rate of 32.55%.
3. In the third quarter of 2020, the company increased its capital expenditure by 120 million yuan, projects under construction reached 8 million yuan, fixed assets reached 244 million yuan, and projects under construction / fixed assets reached 3.35%. At the end of 2019, the company raised investment project with an annual output of 55000 tons of neutral silicone sealant, with a production capacity of 65000 tons per year. The production capacity of electronic glue is 5760 tons / year. In 2019, the company produced 43700 tons of silicone sealant, and there is still room for improvement in capacity utilization. The company is used to build projects with an annual output of 80,000 tons of neutral silicone sealant and 30,000 tons of modified silicone sealant, 15000 tons of two-component silicone rubber and 8000 tons of vinyl silicone oil. The total investment of silicone sealant is 290 million yuan, which can increase the sales income by 1.18 billion yuan and increase the net profit by 102 million yuan. The total investment of two-component silicone rubber and vinyl silicone oil is 73.59 million yuan, and the sales income can reach 260 million yuan after reaching production year. The average annual net profit is 15.8337 million yuan.
4. Profit forecast and rating
We estimate that the return net profit of the company from 2020 to 2022 is 134 million yuan, 159 million yuan and 186 million yuan respectively, the corresponding EPS is 0.58,0.68 yuan and 0.80 yuan respectively, and the PE is 18.1,15.3 and 13 times respectively. Considering that the company is deeply engaged in the silicone sealant industry, mergers and acquisitions and fixed expansion of production, the volume is expected to double, benefit from downstream demand growth and increased industry concentration, performance continues to improve, given a "buy" rating.
Risk hints: declining demand, substantial increase in raw material prices, and new projects falling short of expectations.