\u3000\u3 Shengda Resources Co.Ltd(000603) 806 Hangzhou First Applied Material Co.Ltd(603806) )
Events
Hangzhou First Applied Material Co.Ltd(603806) released the 2021 annual report. In 2021, the company achieved an operating revenue of 12.9 billion yuan, an increase of 53.20% at the same time; The net profit attributable to the parent company was 2.2 billion yuan, an increase of 40% at the same time; Deduct the net profit not attributable to the parent company of RMB 2.1 billion, an increase of 41% at the same time. The corresponding 2021q4 revenue was 3.9 billion yuan, with a ring increase of 22%; The net profit attributable to the parent company was 860 million yuan, an increase of 99%.
Key investment points
Both volume and price rose, and the performance exceeded expectations
The company’s annual report performance in 2021 exceeded expectations. In terms of volume, the company sold 970 million flat films in 2021, an increase of 12% at the same time, and the revenue accounted for 90%. From the perspective of unit price, the unit price excluding tax of adhesive film sales is 11.9 yuan / flat, with a year-on-year increase of 36%. With the increase of volume and price, the company’s photovoltaic adhesive film revenue reaches 11.5 billion yuan, with a year-on-year increase of 52%. It is expected to contribute more than 2 billion yuan of profit and more than 2 yuan of single flat net profit.
In a single quarter, the gross profit margin and net profit margin of the company increased significantly in the fourth quarter, with a gross profit margin of 29.9%, a ring increase of 11 PCTs, a net profit margin of 21.9%, and a ring increase of 8 PCTs, which greatly improved the profitability. It mainly benefited from the sharp rise in the price of adhesive film in the fourth quarter of 2021, reflecting the ability of the company to sell downstream in the process of rising raw materials. Throughout the year, excluding accounting factors such as reclassification of sales freight related to products, the gross profit margin of photovoltaic film of the company decreased by 2.68 PCTs year-on-year, mainly due to the low operating rate of downstream and the rise in the price of raw materials such as particles in the first three quarters of the company.
Rubber film industry leader, continue to expand production and consolidate cost advantage
The company is committed to thin-film functional polymer materials. It mainly produces photovoltaic packaging materials dominated by adhesive film in the module link, with a market share of more than 50%, which is an absolute leader. With the sustained high prosperity of the photovoltaic industry, the company will accelerate the implementation of the Chuzhou 500 million square meter adhesive film project and the Jiaxing 250 million square meter annual output project. It is expected to increase the photovoltaic adhesive film production capacity by Shenzhen Jt Automation Equipment Co.Ltd(300400) million square meters in 2022, so as to further expand the scale advantage of the company in the photovoltaic field. Considering the company’s high capacity utilization over the years, we expect the company’s plastic film shipment volume to be about 1.4 billion square meters in 2022.
Photosensitive dry film business opens the second growth curve
In 2021, the company’s revenue of photosensitive dry film was 730 million yuan (YoY + 30.1%), and the sales volume was 103.29 million square meters (YoY + 136.8%), both of which increased significantly. The company has completed the testing and batch import of photosensitive dry film in many PCB customers, and the products have entered the supply chain system of China’s first-line large PCB manufacturers such as Shennan Circuits Co.Ltd(002916) , Shenlian technology, Shenzhen Kinwong Electronic Co.Ltd(603228) and so on. It is expected to gradually realize domestic substitution, and then open the second growth curve of the company.
Profit forecast
We predict that the company’s revenue from 2022 to 2024 will be RMB 17.819 billion, RMB 22.593 billion and RMB 26.349 billion respectively, and EPS will be RMB 292, RMB 3.67 and RMB 4.38 respectively. At present, the corresponding PE of the stock price is 41, 33 and 27 times respectively, giving the “recommended” investment rating.
Risk tips
The photovoltaic installation failed to meet the expectations, the expansion of photovoltaic adhesive film failed to meet the expectations, the shortage of raw materials, the decline of photovoltaic adhesive film price, etc.
