Main points of investment:
Announcement: the company released semi-annual report that 2021H1 achieved revenue of 1.51 billion yuan, an increase of 40.5% over the same period last year, and net profit of 230 million yuan, an increase of 31.5% over the same period last year, deducting 180 million yuan of non-net profit, an increase of 31.6% over the same period last year. Basically in line with expectations.
The prosperity of passive components has improved, and the revenue growth rates of 2021H1 and Q2 have reached a record high compared with the same period last year. 2021H1's revenue rose 40.5% year-on-year, the highest in the same period in history. 2021Q2 achieved revenue of 840 million yuan, an increase of 28.9 percent over the same period last year, the highest in history except 2018Q2, with a month-on-month increase of 24.6 percent. The net cash flow of 2021H1 operating activities increased by 107.5% compared with the same period last year.
Although affected by the rise in the price of raw materials and the development of new products, the profitability of 2021Q2 has been affected, but it has rebounded sharply from its low point of 2020Q4. 2021Q2 achieved a net profit of 120 million yuan, an increase of 3.6% over the same period last year. 2021H1 gross profit margin 31%, excluding the impact of transportation costs included in the cost of the year-on-year decline in 2.5pct, net profit margin of 15.3%, a year-on-year drop of 1pct. 2021Q2 gross profit margin 30.6%, slightly lower 0.9pct, compared with the 2020Q4 trough 25.9% has rebounded significantly, net profit margin 14.2%, affected by the decline in asset disposal income month-on-month decline in 2.5pct. The rising prices of raw materials and new products are in the stage of development, and profits have not yet been greatly contributed to affect performance.
Industrial capacitors lead the growth. In 2020, the company achieved revenue of 6.0,13.1 and 410 million yuan respectively in the fields of energy-saving lighting, consumer electronics and industry. 82% of the income came from pan-consumer electronics, which has great potential for development in the industrial field. 2021H1 focuses on the development and layout of new energy photovoltaic, industrial control and new energy vehicle emerging markets, and industrial customer orders are increasing rapidly.
The construction of production capacity of chemical foil and high-end products has been carried out in an orderly manner. In March 2021, the second phase of aluminum foil expansion project has reached the scheduled state of use, with a production capacity of 9 million square meters. It continues to invest in the "Rongze Aluminum foil Phase III 20-strip foil project" with a total planned investment of 180 million yuan. After reaching production, it will achieve an annual output of 4.5 million square meters into foil, with an annual output value of 300 million yuan. In 2018, the investment project ox horn aluminum electrolytic capacitor is still under construction, with an investment of 170 million yuan, and is expected to increase its monthly production capacity from 650000 to 4 million. The laminated chip solid aluminum electrolytic capacitor project is still under construction with an investment of 190 million yuan and is expected to increase its monthly production capacity from 4 million to 30 million.
At the end of June 2021, the company's projects under construction increased by 102% over the end of 2020, reaching 296 million yuan.
The epidemic situation in Southeast Asia has not significantly improved, aluminum electrolysis production capacity is limited, the rate of price increase, the company 2021Q3 is expected to follow. According to the Industrial and Commercial Times, the Japanese Big three have suspended production at their factories in Malay, and the transportation of raw materials and finished products has also been hindered, raising the planned 12% price increase in July 9% to 10% 15%. The supply and demand of aluminum electrolytic capacitors is tight, the company has sufficient orders, and the contract debt at the end of June 2021 is 141% higher than that at the end of 2020. The second half of the year to enter the electronic traditional peak season, 2021Q3 is expected to follow the price increase.
Maintain the profit forecast, maintain the "buy" rating: optimistic that the company will continue to achieve breakthroughs in the industrial sector, and benefit from the high demeanor of the passive components industry, maintain the 2021-2023 home net profit forecast of 480 million yuan, 580 million yuan, 680 million yuan, 27 times current market value 2021PE, maintain the "buy" rating.
Risk hint: the risk of raw material price fluctuation; the progress of production expansion is not as expected.