Event: the company announced on August 3 that after the wholly-owned subsidiary Weipris received the tobacco monopoly production license on July 20, today's wholly-owned subsidiaries McWeill and Mike Brothers also received the tobacco monopoly production license. the validity period is from July 25, 2022 to July 31, 2023.
The domestic pattern is clear and the leading advantage is outstanding. Quota production will be implemented in the future, and the production quota will mainly be verified by the nominal capacity of the company's production equipment, the average actual sales volume in three years, and the utilization rate of equipment capacity in the industry. Therefore, the leading enterprises rely on the existing scale advantages, the approval quota is expected to be significantly ahead, and the production pattern is gradually clear. In 2021, the production capacity of Si Moore will reach 2.59 billion standard units / year, and Jiangmen Phase I and Phase II will be put into production, and the total production capacity will exceed 5 billion standard units / year. In addition, the downstream brands show the strong Hengqiang, the largest brand business Yuejie approval sales scale of 329 million. Benefit from the abundant capacity approval quota of the company itself-the downstream customer approval line is leading, the capacity approval line is expected to be abundant, and Simor's leading position is consolidated. The current valuation of the company does not fully feedback the domestic business, waiting for the introduction of the new GB products and the feedback of moving sales in the market, we expect to return to steady growth after a short-term decline, and the domestic valuation tends to be clear.
The visibility of overseas orders is high, and 2022H2 growth is expected to accelerate. So far, the company's main customer British American Tobacco PLC's VUSE SOLO/VIBE/CIRO has passed PMTA audit, customer LOGIC&NJOY has been successfully passed, Si Moore supply chain capability has been verified, VUSE ALTO audit is expected to pass worry-free. In addition, JUUL, VUSE's biggest competitor in the United States, is doubtful through PMTA, and VUSE's market share is expected to increase. At present, with the high visibility of overseas customers' orders and the rapid release of disposable products in the second half of the year, the overseas growth of 22H2 is expected to accelerate; in addition, the independent brand APV and overseas marijuana business are expected to maintain high growth because of their excellent product performance.
The company is the global atomization technology leader, the domestic pattern is gradually clear, waiting for the new national standard products to come out, overseas steady growth and new products are expected to accelerate the volume, in addition, HNB, hemp atomization, medical atomization, beauty atomization and other plates are expected to contribute increment. It is estimated that the net profit from 2022 to 2024 will be 37.5,50.5 and 6.22 billion yuan, corresponding to the PE valuation of 23.9X, 17.8X and 14.4X respectively, maintaining the "buy" rating.
Risk tips: policy regulation exceeds expectations, industry competition intensifies, and Vuse Alto fails to pass the PMTA audit.