\u3000\u3000 Hangzhou Honghua Digital Technology Stock Company Ltd(688789) (688789)
Event overview
The company issued a performance express, realizing an operating revenue of 944 million yuan in 2021, with a year-on-year increase of 31.9%; The net profit attributable to the parent company was 228 million yuan, a year-on-year increase of 33.4%, and the net profit not attributable to the parent company was 211 million yuan, a year-on-year increase of 32.6%.
Analysis and judgment:
The performance of 21q4 was slightly lower than expected due to short-term factors, but the long-term growth trend was not changed
1) benefiting from the rapid development of digital inkjet printing industry, the company’s product demand has increased rapidly. In 2021, the company achieved a revenue of 944 million yuan, a year-on-year increase of 31.9%; The net profit attributable to the parent company was 228 million yuan, a year-on-year increase of 33.4%. In a single quarter, the operating revenue in 2021q4 was 241 million yuan, which was basically the same month on month, with a year-on-year decrease of 13.3%; The net profit attributable to the parent company was 65 million yuan, an increase of 18.0% month on month, basically flat year-on-year. The company’s performance was slightly lower than expected, mainly due to the impact of 21q4 films; Secondly, 21q4 RMB appreciation, equity incentive fees and other factors also slightly dragged down the company’s performance. We believe that power rationing and other factors are short-term disturbances, and the company plans to conduct hedging business to avoid and prevent exchange rate risks. The profitability of the company is expected to be repaired in 2022 without changing the long-term growth trend of the company.
The replacement of digital inkjet printing is accelerated, and the market share is opened rapidly
Since 2017, the processing fee and processing cost of digital printing have decreased significantly. At the same time, the printing accuracy and speed have been greatly improved, and the application in the printing and dyeing industry has been increasing. According to the 2020 report on the development status and trend of global digital ink-jet printing of textiles, the global output of digital ink-jet printing of textiles increased from 1.2 billion meters in 2014 to 4.3 billion meters in 2019, with a compound growth rate of 29%, and the replacement rate of traditional printing technology increased from 2.2% to 7.6%. China printing and dyeing industry association predicts that the output of digital inkjet printing in China will reach about 4.7 billion meters in 2025, accounting for about 29% of the total printing in China. The improvement of the replacement rate of digital printing process will drive the continuous and rapid growth of the company’s digital jet printing equipment and supporting ink products.
Consider the establishment of joint ventures and strengthen the upstream and downstream layout of the industrial chain
The company announced on October 1, 2021 that it plans to jointly invest 80 million yuan with Hangzhou Jiapeng technology partnership and natural person Wang Liyong to establish Zhejiang Honghua Baijin qianyin Home Textile Technology Co., Ltd. with its own capital of 28 million yuan, accounting for 35% of the registered capital of the joint venture. The company plans to establish a joint venture, which can not only provide customers with the landing blueprint of the integrated digital jet printing solution, which is conducive to the application and promotion of equipment and consumables, but also link the upstream and downstream with digital printing technology to build a large-scale small-scale textile quick reaction demonstration platform through “Digital equipment + intelligent chemical plant + quick reaction supply chain”.
Investment suggestion: according to the performance express, we lowered the company’s profit forecast for 2021. In 2021, the company’s revenue and net profit attributable to the parent company were reduced from the previous 961 million yuan and 241 million yuan to 944 million yuan and 228 million yuan respectively. Maintaining the company’s previous profit forecast from 2022 to 2023 unchanged, it is estimated that the revenue from 2022 to 2023 will be 1.349 billion yuan and 1.855 billion yuan respectively, and the net profit attributable to the parent company will be 358 million yuan and 509 million yuan respectively. From 2021 to 2023, the corresponding EPS is 3.00 yuan, 4.71 yuan and 6.70 yuan respectively. Based on the closing price of 205.58 yuan on February 21, 2022, the corresponding PE is 68 / 44 / 31 times respectively. We have not given a rating yet.
Risk warning: fluctuation risk of downstream industry; The risk that the company’s product R & D and marketing are not as expected.
