\u3000\u30003 Eternal Asia Supply Chain Management Ltd(002183) 00218)
PU synthetic leather is a leading enterprise to promote the green ecological revolution of the industry. The bureau first released water-based solvent-free polyurethane synthetic leather
Founded in 1994, the company is mainly engaged in ecological functional polyurethane synthetic leather and polyurethane composites, actively building a “2 + 4” market pattern with orderly levels and strong momentum. Its products are widely used in functional shoes, sofa and home, electronic products, sports equipment, engineering decoration, automobile interior decoration, handbags and bags and other fields; At present, it has established long-term good cooperative relations with well-known sports and leisure and sofa furniture brands at home and abroad, such as apple, Nike, puma, Li Ning, Anta, IKEA, Chivas, aishili and so on.
The company has established and improved the technological innovation mechanism, leading its peers in the number of patents. By the end of September 2021, the company has 482 patents; The production capacity continues to break through, with 40 dry and wet production lines, with an annual output of 85 million meters of polyurethane composites and 70000 tons of polyurethane resin.
The optimization of the company’s product structure and the increase of the proportion of high value-added products drive the volume and price to rise. The company expects that the revenue will be about 2.04 billion in 2021, with an increase of about 32%, and the net profit attributable to the parent company will be 130 ~ 138 million, with an increase of 157.65% ~ 173.51%.
The expansion of downstream application scenarios drives long-term growth, and ecological functional materials have become a new bright spot under the background of environmental protection
Compared with natural leather, polyurethane synthetic leather is not limited by time and raw materials, and its performance is close to or even better than that of leather. It has gradually replaced PVC artificial leather and natural leather as the mainstream products. The application scene has been further expanded with the rise of downstream sports and leisure, new energy vehicles and other industries; China’s polyurethane synthetic leather industry is highly competitive, with a large number of enterprises, small scale and low industry concentration. At present, the leading enterprises have solid advantages in technology and customers.
With the increasingly strict national environmental protection supervision and higher international environmental protection standards, the polyurethane synthetic leather industry is facing transformation and upgrading. The water-based and solvent-free process technology with outstanding environmental protection advantages is gradually favored by downstream customers and has become one of the key driving forces for the development of synthetic leather in the future.
High R & D investment drives product innovation and upgrading, layout advantageous categories in advance and seize the opportunity
Over the years, the company has maintained high R & D investment, laid out cutting-edge technologies in the industry earlier, and made full efforts in core technologies such as water-based, solvent-free, bio based, silicon-based, recycling and degradable, so as to promote the development of products and technologies to medium and high-end. Among them, water-based and solvent-free products have outstanding environmental protection performance and strong downstream demand. At present, they account for about 18% of the company’s revenue, which may be increased to about 40% in 2025. The sales growth of such high value-added products drives the continuous optimization of product structure, and the stability and Sustainability of the company’s profitability are expected to be improved.
Expand the head brand, optimize the customer structure, and have both business stability and growth prospects
Relying on its industry-leading comprehensive advantages such as product quality, process technology, service and supply stability, the company continues to explore new customers. In the past two years, the number of head customers and the depth of cooperation have increased simultaneously, such as apple, Nike, puma, Anta, Li Ning, 361 °, IKEA, europay, Google, Decathlon, Toyota, great wall, Byd Company Limited(002594) and other Chinese foreign brands are expected to bring large order increments, Open up growth space for the company. Orders for the two traditional advantageous categories of shoe materials and home furnishings are expected to maintain steady growth, and emerging categories such as electronic products and automotive interiors may develop rapidly, providing stability and new growth momentum for future business growth.
The advantages of production capacity and scale are obvious, overseas factories are built, and the industrial layout is improved
As of 21h1, the company has an annual production capacity of 85 million meters of polyurethane synthetic leather. The production scale, export volume and the number of exported developed countries of ecological functional PU synthetic leather rank among the forefront of the same industry in China. At the same time, the company responds to the national strategic planning and the development trend of the global synthetic leather industry and downstream market, and arranges Vietnam and Russia; Vietnam is the largest country in China’s synthetic leather export. At the same time, it has the advantages of location and production factors, which makes the company closer to downstream manufacturing customers and promotes cooperation with international brands; The company estimates that 12 million meters of ecological functional polyurethane synthetic leather and composites in Vietnam will be put into operation in 2022h1.
First coverage, buy rating
The company is mainly engaged in ecological functional polyurethane synthetic leather and polyurethane composite materials. Its products are widely used in functional shoes, sofa and home, electronic products, automobile interior, sports equipment, engineering decoration and other fields. High R & D investment drives product innovation and upgrading, early layout of water-based, solvent-free and other advantageous categories, and seize market opportunities under increasingly strict environmental protection requirements; The two advantageous areas have developed steadily, and four low base new categories are expected to increase rapidly. The orders of head customers such as apple, Nike, puma, Anta, Li Ning, IKEA, Google, great wall, Nike, Li Ning, IKEA, Google, Byd Company Limited(002594) and so on are expected to increase in large quantities; We will continue to allocate global production capacity and work with international brands to open up room for growth.
We estimate that the revenue in 202123 will be 2.038 billion yuan, 2.512 billion yuan and 2.907 billion yuan respectively, the net profit attributable to the parent company will be 135 million yuan, 210 million yuan and 284 million yuan respectively, and the EPS will be 0.62, 0.97 and 1.31 yuan / share respectively, corresponding to 21.09, 13.53 and 10.04 times of PE respectively.
Risk tips: exchange rate fluctuation risk, export tax rebate policy change risk, raw material price fluctuation risk, environmental protection risk, etc.
