\u3000\u3 Shengda Resources Co.Ltd(000603) 806 Hangzhou First Applied Material Co.Ltd(603806) )
Performance review
On March 17, the company released its annual report for 2021. In 2021, it realized an operating revenue of 12.858 billion yuan, an increase of 53.20% and a net profit attributable to the parent company of 2.197 billion yuan, an increase of 40.35%. Among them, Q4 achieved a revenue of 3.928 billion yuan, an increase of 34.35% and a ring increase of 22.22%, and a net profit attributable to the parent company of 860 million yuan, an increase of 24.01% and a ring increase of 98.83%, exceeding the expectation.
Business analysis
The rapid price rise of raw materials magnified the cost advantage, and the average profit of adhesive film increased by more than 20% year-on-year: the company realized an income of RMB 11.51 billion in 2021, with a year-on-year increase of + 52.2% and a gross profit margin of 25.66%. After excluding the impact of freight, it was -2.68 PCT year-on-year, which was mainly caused by the downstream operating rate in 2021 and the poor transmission of raw material price rise; The annual sales volume of adhesive film was 967 million square meters, with a year-on-year increase of 10.63% and a market share of about 50-55%. According to the calculation, it is estimated that the company's single average net profit of adhesive film will be about 2 yuan / m2 in 2021, with a year-on-year increase of more than 20%. In the process of rapid price rise of raw materials, the company benefits from the advantages of fine process control and procurement, and the single average profit advantage has been expanded.
The proportion of medium and high-end products increased: in 2021, the company's photosensitive dry film entered the stage of rapid volume, with an annual revenue of 446 million yuan, a year-on-year increase of + 143%; Sales of 103 million square meters, a year-on-year increase of + 136.79%; The gross profit margin was 16.51%, unchanged year-on-year after excluding the impact of freight, mainly due to the structural optimization brought by the sales of medium and high-end products such as soft board dry film and carrier board dry film.
Benefiting from the large-scale terminal demand in 2022, the profitability is expected to remain at a high level: with the gradual release of new silicon material production capacity in 2022, the growth of component output will drive the demand for adhesive film to grow quarter by quarter, and the cost conduction capacity and shipment growth of adhesive film are expected to increase. Even if the price of EVA particles rises in the second half of the year due to short supply, considering the supply chain advantages of leading enterprises and the profit level driven by the price rise of marginal production capacity, it is still expected to maintain the profitability of the company's adhesive film at a high level.
Profit adjustment and investment suggestions
According to our latest forecast for the output of components in 22-23 years, the net profit attributable to the parent company in 22-23 years is increased to 27.4 (+ 14%) and 3.45 (+ 19%) billion yuan respectively. It is estimated that the net profit attributable to the parent company in 2024 will be 4.27 billion yuan, corresponding to EPS of 288, 363 and 449 yuan respectively. Considering the company's dominant position in the field of photovoltaic adhesive film and the high growth of performance in recent two years, the target price is given 145 yuan, corresponding to 40 times of PE in 2023, and the company's rating is raised to "buy".
Risk tips
Product price performance is lower than expected; The price rise of raw materials exceeded expectations; The international trade environment has deteriorated.
