\u3000\u3 Guocheng Mining Co.Ltd(000688) 269 Kaili Catalyst & New Materials Co.Ltd(688269) )
Core view
Kaili Catalyst & New Materials Co.Ltd(688269) disclose the 2021 annual report. The annual operating revenue was 1.59 billion, a year-on-year increase of 51.1%, and the net profit attributable to the parent company was 163 million, a year-on-year increase of 54.3%. Among them, the operating revenue in the fourth quarter was 366 million, a year-on-year increase of 22.6%, and the net profit attributable to the parent company was 36.36 million, a year-on-year increase of 23.2%.
The annual revenue increased rapidly, and the epidemic in the fourth quarter and the decline of precious metal prices affected the revenue performance. The company’s business model determines that the revenue growth comes from the sales volume of catalyst on the one hand and the price fluctuation of precious metals on the other hand. In 2021, the company achieved sales of 124000 kg of heterogeneous catalyst, with a year-on-year increase of 20.8%, and 17700 kg of homogeneous catalyst, with a year-on-year increase of 530.9%. From the more detailed product structure in the prospectus, we can roughly infer that the direct sales volume of homogeneous catalysts with higher unit price should increase significantly in 2021, driving the operating revenue to increase by 51.1% to 1.59 billion.
In 2021, the price of precious metals rose year-on-year, the inventory turnover of the company was relatively fast, the procurement cost rose, and the change of product structure was superimposed. The annual operating cost was 1.33 billion, an increase of 52.5% year-on-year. The company’s gross profit depends more on sales volume and product structure than unit cost. Affected by the rise of unit cost, the gross profit margin decreased slightly. The annual gross profit was 256 million, with a year-on-year increase of 43.8%, and the gross profit margin was 16.1%, with a year-on-year decrease of 0.8pct. In the fourth quarter, due to the Xi’an epidemic and the decline of precious metal prices, the company’s revenue and profit decreased month on month, and the inventory increased. The price of precious metals rose in the first quarter and the operation in the second half of the first quarter gradually resumed the de inventory, and the revenue and performance are expected to be gradually repaired.
R & D investment maintained a high increase, and the performance was in line with expectations. In 2021, the company’s sales expense ratio was 0.59%, with a year-on-year decrease of 0.10pct; The rate of administrative expenses was 1.47%, with a year-on-year decrease of 0.08pct; The R & D expenses kept high growth, keeping pace with the growth of revenue. The number of R & D personnel increased by 13 to 70, and the R & D expense rate was 3.18%, an increase of 0.01pct year-on-year; The financial expense rate was 0.41%, with a year-on-year decrease of 0.08pct. In terms of non operating revenue and expenditure, the company received a certain amount of listing subsidy, with a non operating revenue of 16.51 million, an increase year-on-year. Overall, the company’s performance is basically in line with expectations.
Risk warning: catalyst R & D is less than expected, and catalyst sales are less than expected
Investment suggestion: maintain the “overweight” rating
Thanks to the continuous growth of downstream medicine, chemical industry and other fields, the prospect of precious metal catalyst industry is still good. The company will further strengthen research and development, forge ahead on the basis of stabilizing the stock market, expand new customers, and strive to gradually implement and put into market-oriented research projects. The raised investment projects are expected to be put into operation by the end of 2022, driving the sustainable development of the company. From 235 million and 305 million, the profit forecast for 22-23 years was lowered to 216 million and 285 million respectively, with a growth rate of 32.9% and 32.1%. With the introduction of 24-year forecast, the net profit attributable to the parent company was 377 million, with a growth rate of 32.1%. The EPS for 22-24 years was 231 yuan, 306 yuan and 404 yuan respectively. The current price corresponds to the PE valuation of EPS for 22-24 years, which is 40x, 30x and 23x respectively, maintaining the rating of “overweight”.
