\u3000\u3 China Vanke Co.Ltd(000002) 585 Jiangsu Shuangxing Color Plastic New Materials Co.Ltd(002585) )
Events
The company issued a performance express. In 2021, the company achieved a revenue of 5.93 billion, a year-on-year increase of 17.2%, and the net profit attributable to the parent company was 1.386 billion, a year-on-year increase of 92%. Among them, Q4 made a profit of 413 million, a year-on-year increase of 53.0% and a month on month increase of 11.6%, a record high.
Brief comment
Optical film amplification boosted the annual performance take-off, and Q4’s profit hit another record high. Since 2021, the company has steadily promoted the construction of 200 million square meters of optical film project, and six production lines have been successively delivered and put into operation. The company’s BOPET production capacity has increased by 54% in 21 years, and the leading position in the industry is stable. With the gradual realization of production capacity, it supports the rapid growth of performance. With the vigorous development of the downstream panel industry and photovoltaic industry, the boom of high-end BOPET materials continues, the company’s high-quality core resources are gradually inclined to the new material business with high gross profit, the high-end production capacity is steadily expanded, the product structure is continuously optimized, and the company’s net profit has increased year after year, from 121 million yuan in 2015 to 1.386 billion yuan in 2021, with a compound growth rate of 53%, including Q1, Q2, Q3 Q4 achieved net profit attributable to parent company of RMB 276 million, RMB 328 million, RMB 370 million and RMB 413 million respectively. Q4 performance increased by 11.6% month on month, and the profit in a single quarter hit a new record high.
Products continue to be high-end, with sufficient capacity reserves. In 2021, the global market demand for BOPET film exceeded 5 million tons, with a wide range of applications. China has gradually become the most important production base and consumer market of polyester film products in the world, and the production capacity of polyester film ranks first in the world. As the industry leader, the company has been carefully cultivating BOPET. The existing BOPET production capacity is 860000 tons, and the market share of polyester film ranks first in the world for three consecutive years. Under the trend of the application of the new generation of information technology, the company takes a long-term view, seizes the opportunity, vigorously arranges the field of new materials, and greatly improves the variety, quantity and quality of high-end products. Compared with the conventional polyester film business before 2019, the company has continued to make efforts in the field of high-end BOPET in recent years. In 2021, 300000 tons of production capacity of the company’s 200 million flat optical film project was successfully put into operation, and the production capacity of new materials doubled. At present, the company has begun to gradually convert to solid state, and the current gross profit of high-end materials has exceeded 75%; It is expected that another 200000 tons of functional membrane will be delivered in the first half of 22 years. Compared with the ordinary film, the gross profit margin of the new material polyester film is about 10% – 20% higher. With the further product upgrading and capacity expansion of the company’s BOPET, the cyclical impact of the ordinary film industry on the company is gradually weakened, the company’s long-term growth momentum is sufficient, and the performance can be realized.
Benchmarking procurement optimizes costs and effectively ensures profitability. PTA, the company’s main raw material, has a high correlation with the oil price. In 2021, the average price of PTA and MEG at the cost side were 4723 and 5252 yuan / ton respectively, with a year-on-year increase of 28.0% and 36.8% respectively. Since 2022, the crude oil price center has continued to move upward. As of March 11, 22, the average price of PTA at the cost side was 6080 yuan / ton, up 38.1% year-on-year, and the average price of MEG was 5315 yuan / ton, down 4.1% year-on-year. Under the pressure of rising raw material prices, the company controls the raw material costs to a certain extent through benchmarking procurement. At the same time, with the help of high raw material inventory scale, the actual raw material costs are relatively low under the background of rising oil prices and rising current prices of raw materials; At the same time, the company has appropriately raised the price by 10% – 15% to downstream customers at the beginning of the 22nd year. The control of superimposed cost side will effectively ensure the profitability of the company.
Profit forecast and Valuation: considering the gradual launch of new capacity of high-end functional films in 22 and 23 years, the net profit attributable to the parent company in 2021, 2022 and 2023 is expected to be 1.39 billion yuan, 2.02 billion yuan and 2.67 billion yuan respectively, EPS is 121 million yuan, 174 yuan and 231 yuan respectively, PE is 16.4x, 11.4x and 8.6x respectively, and the target price is 38.8 yuan / share. It is expected to grow significantly and maintain the “buy” rating.
Risk analysis: the production of the project is less than expected, and the downstream demand is less than expected.
