\u3000\u30 Fawer Automotive Parts Limited Company(000030) 22 Levima Advanced Materials Corporation(003022) )
The performance in 2021 is in line with expectations and the profitability has increased significantly. In 2021, the annual revenue was 7.58 billion yuan (+ 27.8%), and the net profit attributable to the parent company was 1.09 billion yuan (+ 70.2%), and the performance was in line with expectations. In the fourth quarter, the single quarter revenue was 1.915 billion yuan (year-on-year – 2.8%, month on month + 4.1%), and the net profit attributable to the parent company was 269 million yuan (year-on-year + 23.3%, month on month – 4.4%). The company’s annual gross profit margin increased by 1.8pp to 25.1%, the three rate decreased slightly by 0.1pp to 7.3%, and the net profit margin increased by 3.6pp to 14.4%, which is the best level in history.
The intensity of R & D investment has increased significantly, and the structure of high-end products has been continuously optimized. In 2021, the R & D expenditure was RMB 273 million (+ 67.0%), and the revenue accounted for 2.7%, significantly increasing by 1.1pp compared with 2020. The OCC unit of the company optimized the production and operation throughout the year. The annual average unit consumption of methanol decreased to 2.646 tons of methanol / ton of olefins. All products with high added value such as high VA content were produced throughout the year. Among them, the production and sales of photovoltaic adhesive film material fl02528 were further improved, the development of new products was promoted in an orderly manner, the sales of high melting random copolymerization PP special material increased by about 12% year-on-year, and the high transparent PP special material was successfully developed.
Driven by demand, EVA boom increased, costs rose, and PP / EO / EOD profits fell. The company’s annual revenue of EVA products was 2.6 billion yuan (+ 93.6%); The gross profit margin reaches 50.5% (+ 12.8pp); The production and sales volume is 130400 / 137600 tons (- 0.7% / + 7.8%); The average sales price is 18871 yuan / ton (+ 79.5%). The company’s Polypropylene / ethylene oxide / ethylene oxide derivatives suffered a decline in profitability due to the rising cost of coal. The revenue of PP / EO / EOD was 1.77/9.3/420 billion yuan (- 1.1% / + 3.4% / + 17.9%) and the gross profit margin was 10.8% / 16.6% / 24.5% (- 13.7pp / – 14.1pp / – 9.8%) respectively.
Fund raising projects and technological transformation projects have been promoted in an orderly manner to build a platform for photovoltaic, lithium battery and degradable new materials. The raised investment project “technology upgrading and transformation project of EVA device tubular tail” has been completed in the first quarter of 2022, increasing the output of EVA device to more than 150000 tons / year; The raised investment project “100000 t / a lithium battery material carbonate combined plant project” is planned to be completed by the end of 2022. In terms of new projects, the company’s 20000 t / a UHMWPE and 90000 T / a vinyl acetate combined plant project is progressing in an orderly manner, and it is planned to be completed in the first half of 2023. The company’s annual output of 200000 tons of lactic acid and 130000 tons of polylactic acid project is planned to be completed and put into operation at the end of 2023 and phase II at the end of 2025. In addition, the company plans to build a 50000 T / a PPC production line with Lianhong gerun, a wholly-owned subsidiary, as the main investor. The construction period of the project is expected to be 3 years. At the same time, a 200000 t / a propylene oxide plant will be arranged to realize self-sufficiency of raw materials.
Risk warning: the risk that the release of production capacity is less than expected; Risk of sharp decline in product prices.
Investment suggestion: the net profit attributable to the parent company is expected to be 1.26/16.1/2.02 billion yuan from 2022 to 2024, with a year-on-year growth rate of 15.6/27.7/25.6%; Diluted EPS = 0.94/1.21/1.51 yuan, and the current share price corresponds to PE = 28.5/22.3/17.8x. Through the extension of its own industrial chain, the company has laid out the industrial platforms of photovoltaic, lithium battery and degradable materials, opened up the future growth space and maintained the “buy” rating.
