Event: Seymour announced a pre-increase in profit and comprehensive income of 50.24-5.553 billion yuan in 21 years, an increase of 109.3%-131.4% over the same period last year, and an adjusted net profit of 51.80-5.709 billion yuan, an increase of 33.0%-46.6% over the same period last year.
Material + technology + structure three-dimensional breakthrough innovation, deep technical moat. On January 18th, the company released a new generation of ultra-thin electronic atomization solution FEELM Air, which uses the industry's first 7-layer composite heating film, which reduces the thickness of the composite heating film from 80 microns to the thinnest 2 microns and the thickness of the ceramic substrate from 4.5mm to 3.5mm. The bionic film ceramic core achieves three breakthrough technologies: 1) bionic material innovation, equipped with the industry's first seven-layer composite heating film to enhance harm reduction; 2) nanotechnology innovation, using nano-scale vacuum coating process, accurate reduction of taste; 3) structural innovation, the use of porous three-dimensional bionic structure to reduce liquid leakage and increase air permeability.
The new technology greatly solves the pain points of the industry and helps customers to improve their stickiness. FEELM Air greatly optimizes user experience:
1) harm reduction increased by 80%, in which heavy metal production decreased by 78.6%, aldehydes and ketones production decreased by 80.7%. 2) Flavor-Lock fresh locking technology increased the degree of reduction by 33%. 3) using the "Puzzle maze second generation" technology platform, the anti-leakage performance increased by 237%. 4) Ultra-high energy efficiency than 1.3mg/W, 13% higher than the previous generation. 5) equipped with the world's smallest linear motor, 150 million vibrations with long life, and only about 2 suction ports with ultra-low power consumption; 6) the industry's first super energy management system, charging for 10 minutes and using for 8 hours; 7) equipped with MEMS sensing technology for the first time, the airflow switch is reliable and the control is more sensitive.
Downstream stock adjustment affects the performance of 21H2, and the long-term dominant position remains unchanged. 21H2 shipments slightly slowed down, mainly due to the impact of policy uncertainty on domestic downstream channel sales. In the long run, the penetration rate of developed areas in the United States is about 50%, and the number of domestic smokers is about 300 million, while the penetration rate of e-cigarettes is only 1%-2%. The future e-cigarette market has huge room for improvement. As the atomization core research and development leader, the company has deep technical barriers and is expected to fully enjoy the penetration dividend.
Profit forecast and investment advice: taking into account the slowdown in downstream inventory due to domestic policy adjustment, the company's 21H2 performance has a slight impact, we lower our forecast, and the company's operating income in 2021-2023 is expected to be 137.71 yuan, 183.04 yuan and 23.603 billion yuan respectively, a year-on-year change of 36.6%, 32.9% and 29.0%, respectively. It is estimated that the company's net profits attributed to the parent company in 2021 and 2023 are 53.45,69.92 and 9.007 billion yuan respectively, an increase of 122.7%, 30.8% and 28.8% respectively over the same period last year. The corresponding PE in 2021 and 2023 are 33.47X, 25.59X and 19.86X respectively. We believe that atomization equipment belongs to the blue ocean industry, with a wide incremental market in the future, and the company is a leader in atomization equipment industry with leading R & D technology. The company has an alpha+beta dual drive to maintain a "buy" rating.
Risk tips: new tobacco tax policy adjustment; intensified competition in the industry; the emergence of new atomization technology to replace the company's ceramic atomization core.