\u3000\u3000 Shenzhen Cotran New Material Co.Ltd(300731) (300731)
Event: on January 28, the company released the performance forecast for 2021. It is estimated that the loss in 2021 will be 12-16 million yuan and the profit in the same period of last year will be 27 million yuan. It is estimated that the operating revenue in 2021 will be 570-590 million yuan, with a year-on-year increase of 86% - 92%. It is estimated that after deducting non recurring profits and losses, the loss is 19-24 million yuan, and the profit in the same period of last year is 17 million yuan. The impact of non recurring profits and losses on profits is about 7.5 million yuan, mainly due to the receipt of liquidated damages for plant relocation and government subsidies.
Impairment risk release, light pack and focus on liquid cooling sector. In accordance with the requirements of accounting standards, the company has made provision for impairment of some long-term equity investments, recognized the loss of changes in fair value of some trading financial assets and recognized the investment loss of associated enterprises. At the same time, the company has made inventory falling price reserves for some products in combination with industrial policies, market environment, future business development direction and other factors and according to the requirements of prudence. We believe that the company is in the period of business transformation, and the downstream business application field is developing from traditional industries such as communication, electric power and household appliances to high growth industries such as power batteries and energy storage batteries. The release of impairment risk of traditional business is conducive to the company to get rid of the burden, pack light and focus on liquid cooling board projects.
Ruitaike's liquid cooling sector capacity continues to expand and the demand for orders is strong. According to the announcement of the company, in order to further meet the needs of customers and improve the delivery capacity, ruitaike plans to expand the existing production capacity to expand the production capacity and capacity scale, and the company plans to increase the capital of ruitaike. The total amount of this capital increase is expected to be no more than 100 million yuan. After this capital increase, the company will hold no less than 67% equity of ruitaike. According to the company's announcement, in January 2022, ruitaike signed a land lease agreement for the construction of new production lines, with a leased building area of about 9401.65 square meters, and the capacity expansion continued to advance steadily. Benefiting from the strong demand for downstream orders, the company will further increase capital and expand production capacity on the basis of two new liquid cooling sector production lines in 2021, and the growth elasticity of liquid cooling sector business can be expected.
Investment suggestion: the impairment of the company's traditional business does not change the expansion momentum of liquid cooling board business, and the risk release is conducive to the company's light loading and promoting business transformation. We lowered the company's profit forecast for 2021 and maintained the profit forecast for 2022-2023. It is estimated that the company's operating revenue for 2021-2023 will be 586 million yuan, 1237 million yuan and 1664 million yuan, and the net profit for 2021-2023 will be - 0.2 million yuan, 111 million yuan and 138 million yuan. Give the company 45 times PE in 2022 and maintain the target price of 39.6 yuan. Maintain the "Buy-A" rating.
Risk tip: the purchase price of liquid cooling sector is lower than expected, the downstream demand of polymer material business is lower than expected, and the supply of raw materials is in shortage
