\u3000\u3 China Vanke Co.Ltd(000002) 324 Shanghai Pret Composites Co.Ltd(002324) )
Events:
Recently, the company released its annual report for 2021, realizing an annual operating revenue of 4.871 billion yuan, a year-on-year increase of 9.52%; The annual net profit attributable to shareholders of listed companies was 237482 million yuan, a year-on-year decrease of 94%.
Investment summary:
The volume and price of main business increased simultaneously, and the rise of raw materials was a drag
The modified plastics business is still the company’s main business. Although the volume and price of this sector rise together, driving the revenue growth of 9.9%, affected by the sharp rise in international oil prices, the company’s high raw material prices in 2021 increased the operating cost of the modified plastics sector by 24.5% year-on-year, and the overall gross profit margin decreased by nearly 10%. In the future, with the solution of the Russian Ukrainian problem and the relaxation of OPEC production reduction, the focus of oil price is expected to fall. Superimposed with the loose expectation of polyolefin and other raw material supply and demand, the situation of high raw material cost of the company is expected to be alleviated.
The company’s modified material products are mainly used in the automotive field, in line with the lightweight trend of new energy vehicles. According to the new energy vehicle industry development plan (20212035), by 2025, the sales volume of new energy vehicles will reach about 20% of the total vehicle sales. With the alleviation of the problem of car core shortage and the improvement of the penetration rate of new energy vehicles, the automotive industry will continue to pick up, and the company’s product sales volume has more room to improve.
LCP business gradually increased the contribution of ICT sector
Through the acquisition of relevant assets of Nantong Haidi LCP business, the company has made up for the technical shortcomings of the company that did not produce type I LCP before, becoming the only company in China with type I and II LCP resin synthesis process. The capacity of LCP modified resin is expanded to 6000 tons, which is expected to alleviate the delivery pressure caused by the current insufficient polymerization capacity.
In the field of LCP film, the company has built a 3 million square meter LCP film production line, which has been recognized and certified by many downstream customers, and is expected to realize mass sales; In the field of LCP fiber, on the basis of building a capacity of 150 tons (200D) of LCP fiber, it is planned to increase the capacity of 2000 tons (1000D) of fiber, and actively cooperate with major American customers in the verification and introduction of fine denier fiber application. In the future, the company’s LCP business is expected to gradually increase in volume, and its contribution to the overall revenue begins to appear.
Reorganize haisida power supply and improve the layout of new energy sector
On the basis of modified materials and ICT materials, the company entered the new energy industry through extension mergers and acquisitions (about 80% equity of Jiangsu haisida power supply Co., Ltd. will be acquired by cash restructuring), so as to realize the strategic transformation and upgrading to the new materials and new energy industry. After the reorganization, the company will take haisida power supply company as the new energy business development platform, jointly with Hengxin Huaye, the strategic shareholder of the listed company, and based on the existing small power battery business of the target company, continue to increase production capacity (planning to expand the production capacity of 1GWh ternary lithium battery and build 5gwh lithium iron phosphate battery) and expand customer channels. At the same time, layout energy storage business products and grasp the strategic opportunities of energy storage and other new energy industries.
Investment strategy: we estimate that the net profit attributable to the parent company from 2022 to 2024 will be 197 million yuan, 297 million yuan and 408 million yuan respectively, and the earnings per share (EPS) will be 0.19 yuan, 0.29 yuan and 0.4 yuan respectively, corresponding to PE of 69.8, 46.4 and 33.8 yuan respectively. Considering the leading position of the company in the automotive modified plastics industry and the application prospect of LCP materials in the 5g era, the company’s performance still has great room for growth and maintains the “buy” rating.
Risk tips: the risk of raw material price fluctuation, the risk of intensified trade friction, customer development less than expected, etc.
