\u3000\u3 Shengda Resources Co.Ltd(000603) 155 Xinyaqiang Silicon Chemistry Co.Ltd(603155) )
Event: the company released its annual report for 2021. During the reporting period, it achieved an operating revenue of 880 million yuan, a year-on-year increase of 79.47%; The net profit attributable to the parent company was 319 million yuan, a year-on-year increase of 103.03%; The comprehensive gross profit margin is 43.15%. Among them, the company realized an operating revenue of 247 million yuan in Q4 in 2021, with a year-on-year increase of 89.27%; The net profit attributable to the parent company was 90 million yuan, a year-on-year increase of 156.59%; The comprehensive gross profit margin is 45.15%.
The revenue and profit increased significantly, and the expense management was good during the period. In 2021, the company’s operating revenue and net profit attributable to the parent company increased by 79.5% / 103.0% respectively year-on-year, hitting a new high since 2017. During the period, the expense rate was 5.8%, a year-on-year decrease of 3.54 PCTs, the lowest in recent three years; Among them, the company’s R & D expenses in 2021 were 281589 million yuan, a year-on-year increase of 56.18%, and the R & D expense rate was 3.2%, accounting for the largest proportion of the expenses during the period.
The single quarter revenue has reached a new level, and the single quarter profit has increased rapidly year-on-year. The company’s single quarter revenue exceeded the threshold of 200 million yuan, with Q4 revenue of 247 million yuan, a year-on-year increase of 89.3%. Driven by revenue, the net profit attributable to the parent company also increased significantly year-on-year, of which Q4 realized a net profit attributable to the parent of 90 million yuan, a year-on-year increase of 156.6%.
Profitability improved year-on-year, and some cash was recovered from investment. During the reporting period, the company’s roe, ROA, ROIC, gross profit margin and net profit margin of sales were 15.4% / 13.9% / 15.2% / 42.9% / 36.3% respectively, with an increase year-on-year. In 2021, with the completion of vinyl and other projects and the technical transformation of functional additives, the profitability of the company may be further improved.
Supported by two major businesses, phenylchlorosilane has an eye-catching performance. During the reporting period, the company’s functional additives and phenylchlorosilane business achieved revenue of 680 / 171 million yuan respectively, with a year-on-year increase of 56.0% / 261.9% and gross profit margin of 44.2% / 38.8% respectively. Thanks to the demand growth of phenylchlorosilane in the downstream market, the proportion of phenylchlorosilane business revenue of the company increased from 9.6% in 2020 to 19.4% in 2021, an increase of 9.8pcts.
High performance growth continues to be realized, and high-end applications and fund-raising investment projects have not been fully priced. In our in-depth report, we have fulfilled our expectations of high growth in revenue and profits, but the market has not priced the high-end applications of products such as hexamethyl, vinyl and phenyl. We believe that as the “edible salt” of the silicone industry, functional additives, phenylchlorosilane and downstream varieties will provide the company with continuous high profit growth power. However, the application of hexamethyl in photoresist, electrolyte and medicine, and the application of vinyl and phenyl in high-end fields such as new energy and military industry have not been fully priced. With the development of high-end application scenarios of the company’s products, the company’s production capacity continues to be released, The volume of revenue and profit is expected to reach a higher level.
Profit forecast and Valuation: as the company’s technological transformation projects climb, we raise the company’s net profit attributable to the parent company in 2022 / 2023 to 468 / 656 million yuan (the previous value is 403 / 544 million yuan). At the same time, we expect the company to realize a net profit attributable to the parent company of 760 million yuan in 2024, and the corresponding EPS from 2022 to 2024 are 3.01/4.22/4.89 yuan / share respectively. The annualized growth rate of the company’s net profit attributable to the parent company from 2017 to 2021 is 48.20%. We expect the growth rate of the company to reach 46.52% in 2022. According to the valuation of PEG 1, the company is given 30 times PE, the target price in 2022 is 90.26 yuan / share, and the “buy” rating is maintained.
Risk warning: the price of raw materials rises sharply; The construction of raised investment projects is lower than expected; Environmental protection and safety production issues
