The production capacity of the fund-raising project releases the high prosperity of the superimposed industry, and the profit has improved. The company released its 2020 financial results, with an annual operating income of 1.153 billion yuan (28.07% compared with the same period last year) and a net profit of 65 million yuan (36.79% compared with the same period last year). The gross profit margin and net profit margin were 18.53% and 6.23%, respectively, an increase of 1.67% and 0.54pct respectively. Among them, 2020Q4 achieved a single-quarter revenue of 397 million yuan (48.45% compared with the same period last year), with a net profit of 18 million yuan (29.51% compared with the same period last year). The company's main products engineering plastic alloys and modified general plastics belong to the modified plastics industry, which continued to improve in 2020, which led to a significant improvement in the company's profitability. The company's IPO investment project entered the capacity release stage. Jiangsu Walter achieved sales revenue of 291.3459 million yuan during the reporting period, an increase of 169.64% over the same period last year, and a net profit of 35.8906 million yuan, an increase of 1380.88% over the same period last year.
New polyamide and polysulfone projects, plus special engineering plastics layout companies in recent years to meet the requirements of high-end industries such as electronic communications manufacturing industry for high-frequency, precision and integration of materials, increased material research and development and investment in high-end fields. The company acquired Samsung's LCP business in 2014 and new PTFE products in Zhejiang Kesai in 2019. These two new materials have excellent electrical properties, have important applications in 5G high frequency signal transmission and semiconductor manufacturing, and are expected to become a new driving force for the company's performance growth in the future. The company plans to raise 430 million yuan in a non-public offering in 2020, of which 300 million yuan will be invested in the construction of 20, 000 tons of special engineering plastics polyamide and polysulfone (each with a production capacity of 10, 000 tons, built in three phases). The new polyamide and polysulfone products have important applications in the fields of electronic communication, transportation, mechanical manufacturing, medical devices and so on because of their excellent performance.
Kesai fulfilled its performance commitment and increased investment in semiconductor 5G new materials. Last year, the company made rapid progress in fluorine-containing engineering polymers, with more applications in downstream semiconductor processing, 5G communications, flat panel display and other industries. Zhejiang Kesai, a fluorine material manufacturing platform, achieved a net profit of 19.43 million yuan last year. In order to better meet the needs of customers' products, the company plans to invest 525 million yuan to build a new project with an annual output of 10000 tons of high-performance new materials in Huzhou, and increase investment in semiconductors and 5G communication equipment.
Risk Tips:
Downstream demand is lower than expected; the production progress of new projects is lower than expected; and the price of upstream raw materials has risen sharply.
Investment advice: maintain the "overweight" rating.
We are optimistic about the sustainable development of the company in the direction of special engineering plastics. It is estimated that the net profit from 2021 to 2023 will be 0.80max, 106pm, 135 million yuan, 23.4%, 32.2%, 27.7%, diluted PE is 0.60 / 0.79, 1.01 yuan, corresponding to PE 20.3, 16.0, 14.3, maintaining the "overweight" rating.