\u3000\u3 Shengda Resources Co.Ltd(000603) 806 Hangzhou First Applied Material Co.Ltd(603806) )
Event: Hangzhou First Applied Material Co.Ltd(603806) issued annual report for 2021.
The performance is in line with expectations, and the rubber film leader maintains excellent profitability. In 2021, the company achieved an operating revenue of 12.858 billion yuan, a year-on-year increase of 53.20%, and a net profit attributable to the parent company of 2.197 billion yuan, a year-on-year increase of 40.35%. The gross profit margin and net profit margin of sales were 25.05% and 17.09% respectively, of which the gross profit margin decreased by 3.31pcts year-on-year due to the impact of freight included in operating costs, and the net profit margin remained at a high level. 2021q4 benefited from the transmission of raw material price rise to the downstream, and the net profit margin reached 21.89%, showing the excellent profitability of the rubber film leader.
The business of photovoltaic materials grew steadily and maintained its leading position. In terms of photovoltaic adhesive film business, the company sold 968 million square meters of adhesive film, with a year-on-year increase of 11.85%. Affected by the price rise of raw materials and products, the company realized an operating revenue of 11.51 billion yuan, with a year-on-year increase of 52.20% and a gross profit margin of 25.66%. After excluding the impact of freight reclassification, the gross profit margin decreased by 2.68 PCTs year-on-year; In terms of photovoltaic backplane business, the company achieved a backplane sales of 68 million square meters, a year-on-year increase of 19.43%, an operating revenue of 726 million yuan, a year-on-year increase of 30.11%, and a gross profit margin of 13.19%. After excluding the impact of freight reclassification, the gross profit margin decreased by 6.48 PCTs year-on-year. With the high demand for downstream installed capacity, the company accelerated the implementation of “Chuzhou 500 million flat photovoltaic film project”, “Jiaxing 250 million flat photovoltaic film project”, “Jiaxing 110 million flat photovoltaic backplane project” and the construction of overseas photovoltaic film production base, and strive to add Shenzhen Jt Automation Equipment Co.Ltd(300400) million square meters of photovoltaic film capacity and 60 million square meters of photovoltaic backplane capacity in 2022, so as to strengthen the leading advantage.
The electronic film business is accelerating and is expected to become a new growth pole of the company. During the reporting period, the company’s electronic material business was carried out smoothly, and the sales volume of photosensitive dry film increased rapidly. In the whole year, the shipment of electronic materials was 103 million square meters, a year-on-year increase of 136.79%, the operating revenue was 446 million yuan, a year-on-year increase of 143.42%, and the gross profit margin was 16.51%. After excluding the impact of freight reclassification, it was basically flat year-on-year. In 2015, the company began to enter the business of electronic film materials, and the shipment volume has increased exponentially in recent years. It is expected that the shipment volume of photosensitive dry film will account for about 8% of the global market in 2021. At present, 420 million square meters of photosensitive dry film production capacity is newly arranged in Jiangmen, Guangdong, to support PCB manufacturers in the Pearl River Delta. After the expansion is completed, it is expected to achieve 636 million square meters of production capacity; In terms of customer development, it has entered the supply system of Shennan Circuits Co.Ltd(002916) , Shenlian technology, Shenzhen Kinwong Electronic Co.Ltd(603228) , Aoshikang Technology Co.Ltd(002913) and other large PCB manufacturers in China; In terms of product structure, the company has launched the mid-range product LDI dry film, breaking the monopoly of overseas manufacturers, and the proportion of shipments continues to increase. In addition, FCCL has completed a small-scale batch trial, and the customer test feedback results of photosensitive covering film are good. It is expected to gradually promote mass production in the future.
Performance forecast: the company is expected to realize a net profit attributable to the parent company of RMB 2.818/35.24/3.816 billion from 2022 to 24, corresponding to 42.1/33.7/31.1 times of PE, and maintain the rating of “overweight”.
Risk warning: global demand is less than expected; The price reduction of adhesive film exceeded expectations; New business expansion is less than expected
