\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 063 Anhui Wanwei Updated High-Tech Material Industry Co.Ltd(600063) )
Key investment points
The performance reached a record high in 2021, and the average price of PVA increased by 4664 yuan / ton month on month.
The company is a leader in China’s polyvinyl alcohol (PVA) industry. According to the company’s 2021 annual report, the company currently has a PVA production capacity of 310000 tons (60000 tons in Anhui, 50000 tons in Guangxi and 200000 tons in Inner Mongolia). The company’s PVA products are mainly used in subdivided fields such as construction, adhesives and dispersants. In 2021, the gross profit margin of the company’s main products was 24.94%, up from +6.44pct, of which, the gross profit margin of PVA products was 34.70% (compared to +15.31pct), cement and clinker gross profit rate 31.93% (-9.21pct), VAE emulsion gross profit rate 26.01% (compared with -1.72pct), and vinyl acetate gross profit rate 31.76% (+35.31 PCT), the four kinds of products accounted for 33.44% of the total revenue respectively. 14.28%, 7.31% and 8.44%, accounting for 63.47% in total. The gross profit margin of the company’s main products PVA and vinyl acetate increased significantly, mainly due to the increase of product prices. During the reporting period, the average selling prices of PVA, cement, clinker and VAE emulsion were 1546526 yuan / ton, 360.51 yuan / ton, 325.03 yuan / ton and 791637 yuan / ton respectively, compared with +61.47%, +13.17%, +6.95% and +54.94% respectively. In addition, it is worth noting that the average price of PVA products of the company has been increased to 2000313 yuan / ton in 2021q4 single quarter, and 466428 yuan / ton in Q3 single quarter. In terms of inventory, according to the data of Zhuo Chuang information, as of March 14 this year, the inventory of PVA enterprises has decreased to 1.2000 tons, and the inventory level is running at a low level. Considering that the overall supply and demand pattern of PVA industry is in a tight balance, and the cost of petroleum ethylene PVA caused by calcium carbide PVA and “Russia Ukraine” situation remains high, we are optimistic about the company’s integrated layout of “calcium carbide vinyl acetate PVA” and believe that the profitability of the company’s main businesses is expected to continue well.
Forge ahead to the 14th five year plan and rebuild a new Anhui dimension.
According to the company’s annual report, during the reporting period, the company established the development goal of the company’s “five industrial chains” according to the “14th five year plan”. The company’s annual output of 10000 tons of PVB resin project has reached the production standard, and the product quality ranks in the forefront of the industry; The annual output of 35000 tons of differentiated polyester project has been successfully tested at one time; The trial run of the project with an annual output of 20000 tons of rubber powder was successful. In addition, the company will speed up the progress of construction projects. The annual output of 60 thousand tons of V AE emulsion, 5000 tons of membrane grade PVA, 7 million square meter polarizer, 7 million square meters of PVA optical film and other projects will soon be completed and put into operation, gradually forming a new material industry cluster of the company, laying a solid foundation for the “forge ahead in 14th Five-Year and rebuild new Wan Wei”. We are optimistic about the layout of the company’s new projects and believe that with the orderly production of new projects, while expanding its business line, the company’s profitability is expected to continue to rise.
Profit forecast and valuation
The company is a leader in China’s PVA industry. PVA products have great advantages over their peers in scale, category and technology. In addition, the new material fields such as PVA optical film and PVB resin actively arranged by the company are expected to open a growth channel for the company. We are optimistic about the company’s strategic layout and technical strength. It is estimated that the company’s net profit from 2022 to 2024 will be 1.386 billion yuan, 1.558 billion yuan and 1.772 billion yuan respectively, with a year-on-year increase of 41.14%, 12.37% and 13.78%, corresponding to 7.70, 6.85 and 6.02 times of PE respectively, maintaining the “buy” rating.
Risk tips
The prices of raw materials and products fluctuate greatly; Exchange rate and trade risks; Brain drain risk; Environmental protection policy risk, etc.
