\u3000\u30 Guangdong Tengen Industrial Group Co.Ltd(003003) 98 Phichem Corporation(300398) )
The company released its 2021 annual report, which achieved an operating revenue of 2.627 billion yuan, a year-on-year increase of 40.94%, and a net profit attributable to the parent company of 386 million yuan, a year-on-year increase of 67.89%. The performance was in line with expectations. Maintain the overweight rating. The company issued an announcement on the pre increase of performance in the first quarter. In the first quarter of 2022, it is expected to realize a net profit attributable to the parent company of 123143 million yuan, with a year-on-year increase of 80% – 110%.
Key points supporting rating
The performance is in line with expectations. The company released its 2021 annual report. In 2021, it realized an operating revenue of 2.627 billion yuan, a year-on-year increase of 40.94%; The net profit attributable to the shareholders of the listed company was 386 million yuan, a year-on-year increase of 67.89%, and the net profit after deducting non recurring profits and losses was 321 million yuan, a year-on-year increase of 76.47%. In the fourth quarter, the operating revenue in a single quarter was 740 million yuan, a year-on-year increase of 42.49%, the net profit attributable to the parent was 115 million yuan, a year-on-year increase of 92.04%, and the net profit attributable to the parent after deduction was 88 million yuan, a year-on-year increase of 69.68%. In addition, the company issued a pre increase announcement of performance in the first quarter. It is expected to realize a net profit attributable to the parent company of 123143 million yuan in the first quarter of 2022, with a year-on-year increase of 80% – 110%.
Domestic substitution accelerated, and the business of screen display and semiconductor materials continued to grow rapidly: in 2021, screen display materials benefited from the improvement of localization rate, the transfer of global panel production capacity to China, and the company’s new product panel photoresist was put into the market. The annual sales revenue was 1.300 billion yuan, a year-on-year increase of 42.26%, and the gross profit margin was 42.35%, a decrease of 0.91% compared with the same period of the previous year. Affected by the increase of downstream demand, semiconductor materials achieved a sales revenue of 553 million yuan, a year-on-year increase of 35.23%, a gross profit margin of 38.42%, and a year-on-year decrease of 0.39%. In addition, according to the company’s interactive response in Shenzhen Stock Exchange, the company’s self-developed i-line photoresist and KrF lithography supporting BARC materials have been in the stage of client import verification. It is expected that the business of screen display and semiconductor materials will continue to grow driven by the large volume of new products.
The demand for some pharmaceutical intermediates increased significantly, and the business income increased significantly. According to the company’s interaction and easy response in Shenzhen Stock Exchange, the pharmaceutical intermediate products produced by the company mainly include bromoacetonitrile, tert butyl bromoacetate, cyclohexylbenzene, chlorocyclohexane, etc., and upstream API factories that supply Pfizer, Huahai, Haizheng and other pharmaceutical enterprises. According to the company’s annual report, the company has 5500t / a production capacity of various halogenated hydrocarbon medical intermediates, and 2230t / a production capacity of halogenated hydrocarbon medical intermediates is under construction. With the gradual improvement of the effective production capacity of existing pharmaceutical intermediates and the orderly promotion of the production capacity under construction, the company is expected to benefit from the sharp increase in the demand of downstream customers in the pharmaceutical intermediates sector and the increase in the output of pharmaceutical intermediates in 2022 and 2023, and the profitability will remain high.
Valuation
The profit forecast was raised due to the sharp increase in the demand of downstream customers of pharmaceutical intermediates. It is estimated that the EPS of the company from 2022 to 2024 will be 1.14 yuan, 1.29 yuan and 1.30 yuan respectively, and the PE corresponding to the current stock price will be 25.9 times, 22.9 times and 22.7 times. We are optimistic about the booming production and sales of follow-up pharmaceutical intermediates and maintain the overweight rating.
Main risks of rating
The intensification of industry competition led to the decline of gross profit margin, and the production progress of LCD panel and the localization rate of upstream materials were lower than expected.
