\u3000\u3 Bohai Water Industry Co.Ltd(000605) 020 Zhejiang Yonghe Refrigerant Co.Ltd(605020) )
Core view
Continuously improve the industrial layout and actively adjust the product structure, and the company's performance increased significantly in 2021. The company issued the annual report for 2021: with the gradual completion and production of the company's new production units, the scale of production and sales of the company's main products was expanded and the product structure was optimized; At the same time, the downstream demand of some fluorine chemical products was driven by the development of new energy, photovoltaic and other emerging industries. In 2021, the company achieved a total operating revenue of 2.899 billion yuan, a year-on-year increase of 48.51%; The net profit attributable to the parent company was 278 million yuan, a year-on-year increase of 173.12%. Among them, in 2021, the export revenue of the company's main business reached 1.494 billion yuan (accounting for 51.5% of the total revenue), with a year-on-year increase of 111.89%, realizing a restorative growth; The sales revenue of high value-added fluoropolymer materials reached 596 million yuan (accounting for 20.6% of the total revenue). Overall, in 2021, the company continued to improve its industrial layout, accelerate project construction, seize market opportunities, and actively adjust its product structure to seize market share.
Waiting for the recovery of the third generation refrigerant cycle, the company's third generation refrigerant production capacity accounts for about 11% of the country. From 2020 to 2021, the prosperity of three generations of refrigerants is under pressure, while the company's three generations of refrigerants take the route of "differentiated competition", and the profitability is still considerable compared with its peers. As the supply side structural reform continues to deepen, quota management will be implemented at the legislative level, the industry competition pattern tends to be concentrated, and the downstream demand returns to steady growth, we are optimistic that the third generation refrigerant is expected to usher in a boom recovery. At present, the company's annual production capacity of fluorine-containing refrigerant products is 140000 tons, mainly including R22, R152a, r143a, R227ea, R125, R134a, R32 and other products, and the production capacity of mixed refrigerant is about 18000 tons. Among them, the company's third-generation refrigerant production capacity is about 116700 tons, accounting for about 11% of the country's total third-generation refrigerant production capacity (1.09 million tons). In addition, the company has the capacity of 24000 tons of R142b and 55000 tons of R22 respectively, some of which are used as raw materials for supporting downstream products.
Focus on high value-added fluoropolymers and other products, and steadily promote the construction of PVDF project. The company's strategic positioning is clear: focus on high value-added fluoropolymer materials and environmental protection fluorocarbon chemicals. The company's FEP product technology accumulation is leading in China, with excellent FEP product performance and environmental protection technology; PVDF, PFA, ETFE and other technical reserves are abundant. At present, the company is accelerating the construction of Inner Mongolia Yonghe VDF and PVDF projects and shaowuyonghe PVDF and HFPO expansion projects. The total capacity of PVDF under construction is 16000 tons / year. We expect that the production capacity of 60000 tons of PVDF in Inner Mongolia is expected to be completed by the end of 2022.
Risk warning: price fluctuation of raw materials; Downstream demand is lower than expected; The progress of projects under construction is less than expected.
Investment suggestion: for the first time, give "overweight" rating. At present, the company has created a perfect layout of "fluorine chemical industry chain integration", with prominent cost advantages and strong ability to resist cyclical fluctuation risk. We expect the net profit attributable to the parent company from 2022 to 2024 to be 432 / 581 / 728 million yuan respectively, with a year-on-year growth rate of 55.3% / 34.5% / 25.2%; Diluted EPS = 1.60/2.15/2.70 yuan, corresponding to the current share price, corresponding to PE = 15.5/11.5/9.2x. For the first time, give a "overweight" rating.
