\u3000\u3 Shengda Resources Co.Ltd(000603) 806 Hangzhou First Applied Material Co.Ltd(603806) )
The company released its annual report for 2021, and its performance slightly exceeded expectations; The leading position of the company’s plastic film is stable, the product volume and price rise together, and the high-quality production capacity continues to expand; The electronic materials business is advancing rapidly; Maintain the overweight rating.
Key points supporting rating
In 2021, the profit increased by 63% year-on-year, slightly exceeding the expectation: the company released the annual report of 2021, and the annual revenue was 12.858 billion yuan, a year-on-year increase of 53.20%; The net profit attributable to the parent company was 2.197 billion yuan, a year-on-year increase of 40.35%, and the net profit deducted was 2.140 billion yuan, a year-on-year increase of 40.67%. In 2021q4, the net profit attributable to the parent company was 860 million yuan, with a year-on-year increase of 24.01% and a month on month increase of 98.83%. The company’s annual report performance slightly exceeded market expectations. At the same time, the company plans to increase 4 shares for every 10 shares, with a cash dividend of 3.50 yuan (including tax).
The leading advantage is highlighted, and the volume and price of photovoltaic adhesive film rise simultaneously: facing the tight supply of EVA particles, the company’s leading procurement advantage is highlighted. The annual shipment is 968 million square meters, with a year-on-year increase of 11.85%, and the average settlement price is 11.89 yuan / square meter, with a year-on-year increase of 36.08%; The gross profit margin of the company’s adhesive film decreased by 3.37pcts to 25.66% year-on-year, but it is still significantly higher than the general level of the industry. We expect that in 2022, the supply of EVA particles in the upstream of the adhesive film will still be slightly in tight balance, and the profitability of the adhesive film is expected to maintain a high level.
Electronic materials have entered the rapid volume stage: the company’s photosensitive dry films have been shipped in batches, while medium and high-end products have entered the sales stage, and the product structure has been further optimized. The annual sales of photosensitive dry films reached 103 million square meters, with a year-on-year increase of 136.79%; The revenue was 446 million yuan, a year-on-year increase of 143.42%. In addition, FCCL has completed small-scale batch trial, and aluminum-plastic film has formed large-scale sales.
High quality production capacity continues to expand, and the expansion is expected to accelerate during the year: in terms of photovoltaic, the company accelerated the construction of 500 million square meters of adhesive film in Chuzhou, 250 million square meters of adhesive film in Jiaxing, overseas adhesive film base and 110 million square meters of backplane project. During the reporting period, some production capacity in Chuzhou was put into operation, and the preparation for the backplane project was completed. The company strives to add Shenzhen Jt Automation Equipment Co.Ltd(300400) million square meters of film capacity and 60 million square meters of backplane capacity within this year, and the pace of production expansion is expected to accelerate. In terms of other new materials, the first phase of the expansion of 20 million square meters of aluminum-plastic composite film has been completed, and the preliminary preparations have been carried out for the expansion of 420 million square meters of photosensitive dry film and 24000 tons of alkali soluble resin.
Valuation
Under the current share capital, combined with the annual report of the company and the supply and demand of the industry, we adjusted the predicted earnings per share of the company from 2022 to 2024 to 2.75/3.62/4.21 yuan (the original prediction from 2022 to 2024 was 2.42/2.91 / – yuan), corresponding to 45.4/34.4/29.6 times of P / E; Maintain the overweight rating.
Main risks of rating
Price competition exceeds expectations; Raw material cost pressure exceeds expectations; New capacity expansion and new business development did not meet expectations; Photovoltaic policy does not meet expectations; The impact of covid-19 epidemic exceeded expectations.
