Current investment tips:
Fundamentals: Hujiang materials focuses on the production, marketing and research of high barrier industrial flexible packaging. Its products are positioned as medium and high-end, and its downstream is bound with high-quality large customers in the fields of chemistry, electricity (lithium battery), food, medicine and so on. In terms of products, it has formed five series of products: aluminum plastic composite heavy bag, aluminum plastic composite inner bag, PE heavy bag, PE inner bag and functional film. Among them, aluminum plastic composite heavy bags are traditional advantageous products, accounting for nearly 60% of the revenue; Aluminum plastic composite non-magnetic bag realizes the import substitution of lithium battery anode material packaging, and has become an important fist product of the company. In terms of customers, the company grows together with key customers. It is the main supplier of BASF, DSM and other multinational enterprises. In recent years, the transaction scale with Wanhua Chemical Group Co.Ltd(600309) has increased rapidly, and the business cooperation with Gotion High-Tech Co.Ltd(002074) has deepened.
Driven by the same direction of R & D and production, the company's performance is stable and good, and the gross profit margin is significantly higher than that of comparable companies. At the R & D end, the actual controller of the company personally presided over the new product development and equipment technical transformation, accumulated a large number of proprietary technologies such as formula and process, and accumulated rich technical transformation experience. On the production side, facing the customized needs of customers in small batches and multiple batches, the company's flexible production system is mature. During the reporting period, the average capacity utilization rate of packaging bag products reached 99.3%, and the average production and marketing rate reached 98.75%. The company achieved a revenue of 231 million in 2020 and 251 million in the first three quarters of 2021, a year-on-year increase of 56.77%. During the reporting period, the average gross profit margin of the company was 34.77%, about 9 points higher than the average of comparable companies.
Issuance scheme: this new share issuance adopts the direct pricing method. The subscription date is January 4, 2022, and the subscription code is "889888". The initial issuance scale is 8.2343 million shares, accounting for 26.56% of the total share capital of the company after the issuance (before the exercise of the over allotment option). It is expected to raise 154 million yuan, and the total market value of the company after the issuance is 579 million. The issuing price of new shares is 18.68 yuan / share, 42% higher than the base price, and the issuing PE (TTM) is 13.34x, about 5.5% of the median value of comparable listed companies; 20% strategic placement of initial issuance (excluding over placement) and 80% online issuance, including 9 offline war investment, including 3 public offerings, 2 securities companies and 4 private placements, with a subscription amount close to; The amount of online top grid subscription is 391100 shares, and the capital needs to be frozen is 7.3057 million yuan.
Calculation of success rate: considering the balance between capital cost and new income, we believe that participants will timely and dynamically adjust their subscription behavior according to factors such as IPO performance, success rate and single financing scale. Based on the recent enthusiasm for subscription of new shares, it is assumed that 10% - 16% of investors participate in this subscription; The average usage of each frozen fund account is assumed to be 200000. Based on the number and price of new shares issued, the winning rate is expected to be between 0.053% - 0085%.
Industry situation: technology + materials lead the industrial upgrading, and the downstream high-end demand is large. Benefiting from the development of new materials, process innovation and iteration of production equipment, high barrier packaging has gradually developed into a subdivided field of plastic packaging with high added value. At present, there is a high-end development trend in the demand structure of downstream customers. In the future, the demand for medium and high-end high barrier packaging products is highly deterministic. According to the main application fields of products: 1) the cycle attribute of the chemical industry is strong, but the Matthew effect and structural optimization in the industry are good, and the market share is concentrated in professional quality suppliers; 2) The prosperity of lithium battery industry is high. It is estimated that China's lithium battery shipment CAGR will exceed 25% in 21-25 years, which is expected to drive the rapid growth of demand for high-end products; 3) In the field of food, plastic packaging accounts for a high proportion of food packaging, which will also fully benefit from the upward trend of China's end consumption quality, level and behavior.
Subscription suggestions: it is recommended to participate. From the perspective of issuance scheme, 1) the initial P / E ratio of new shares is low, which has better valuation attraction compared with peers and comparable companies; 2) The initial market value is small, and the tradable proportion of old shares is low, which is conducive to attracting market funds after listing. From the perspective of fundamentals, the company specializes in blocking the industrial flexible packaging segment track and enjoys certain advantages in production, R & D and customers. With the ramp up and production of new advantageous capacity, the company has strong certainty of future performance growth.
Risk factors. 1) Risk of relative concentration of major customers; 2) The risk of brain drain and technology leakage; 3) The risk of market share decline caused by intensified market competition; 4) Risk of raw material price fluctuation.
(Shanghai Shenyin Wanguo Securities Research Institute)
