\u3000\u30003 Dongguan Winnerway Industry Zone Ltd(000573) 00057)
Event: according to the annual report, the company achieved a revenue of 5.437 billion yuan in 2021, a year-on-year increase of 7.28%; The net profit attributable to the parent company was -44 million yuan, a year-on-year decrease of 156.99%. Among them, 2021q4 achieved an operating revenue of 1.364 billion yuan, a year-on-year decrease of 5.67% and a month on month increase of 12.63%; The net profit attributable to the parent company was -66 million yuan. The fluctuation of the company’s performance is mainly due to the sharp fluctuation of the price of raw materials such as aluminum in 2021 and the provision for goodwill impairment and inventory falling price.
The capacity of battery aluminum foil is released rapidly, and the subsequent capacity planning is full. In 2021, the company’s aluminum processing business achieved an operating revenue of 2.849 billion yuan, a year-on-year increase of 11.12%, and a gross profit margin of 9.85%, a year-on-year decrease of 1.59pct, mainly due to the significant upward impact of international aluminum prices during the year. In addition to traditional aluminum sector, strip and foil, the company’s aluminum processing business achieved 23000 tons of battery foil blank sales in 2021, with a year-on-year increase of 155%; 2886 tons of battery foil were achieved, with a year-on-year increase of 825%. High value-added battery aluminum foil is the main growth point of the company. The company’s battery foil has entered the supply chain of Contemporary Amperex Technology Co.Limited(300750) and other high-quality customers. The company’s project of “annual output of 72000 tons of high-precision electronic foil” has been rapidly promoted. The production capacity of 40000 tons in phase I uses high-end equipment imported from Germany and has been put into operation before the year. The production capacity of 32000 tons in phase II is stepping up and is expected to be put into operation within the year. At the same time, the company has arranged the production capacity of 80000 tons of battery foil blank and 50000 tons of double zero foil blank, and has disclosed the non-public offering plan of no more than 1.7 billion yuan in January 2022. It plans to invest and build 100000 tons of high-precision electronic foil production capacity again. Driven by the demand for new energy vehicles and energy storage, the market scale of power batteries has maintained a high growth. The company actively distributes the production capacity of positive aluminum foil of batteries and connects with high-quality downstream customers. The future prospect is promising.
The impairment provision is implemented, and the traditional business is expected to be improved. In 2021, the company’s paper packaging, conductive film and trade business achieved revenue of 507 / 0.33/1.85 billion yuan respectively, and the gross profit margin was 15.34% / – 30.79% / 1.23% respectively. In 2021, the company accrued a total of 80 million yuan of asset and credit impairment losses, which will no longer have an impact on relevant projects, and it is expected to “pack light” in the follow-up.
Investment suggestion: we expect the company to achieve revenue of RMB 7.071/78.78/10.65 billion and net profit attributable to parent company of RMB 263352/551 million from 2022 to 2024, corresponding to pe27.5 billion 94 / 20.83/13.32 times, maintaining the “overweight” rating.
Risk warning: the production capacity is less than expected; Aluminum prices fluctuate sharply; Industry competition intensifies.
