\u3000\u3 Bohai Water Industry Co.Ltd(000605) 377 Hangzhou Huawang New Material Technology Co.Ltd(605377) )
The leading enterprise of medium and high-end decorative base paper, with printable decorative base paper as the core product.
In 2021h1, the revenue of printable decorative base paper, plain decorative base paper and wood pulp trade was 965 million yuan, 93 million yuan and 259 million yuan respectively, accounting for 72.61%, 7.01% and 19.47% respectively. In addition, the company's net profit attributable to the parent company cagr48% from 2013 to 2021, and its profitability increased steadily. The net profit attributable to the parent company in 21 years was 450 million yuan, an increase of 73% at the same time, mainly due to the release of production capacity of Ma'anshan factory, the high operation of capacity utilization and production and marketing rate, the optimization of product structure, the increase of customized production proportion and other factors. The growth of China's decorative base paper industry is driven by volume and price, with Cr4 as high as 74%, the localization rate is gradually improved, and the international competitiveness is enhanced.
From the perspective of the total industry volume: in 2020, the market scale of China's decorative base paper industry was 11.48 billion yuan, and the sales volume was 1.113 million tons, with a year-on-year increase of 2.58%; The unit price was 10300 yuan / ton, with a year-on-year increase of 1.74%. In addition, the sales volume of decorative base paper in China in 2017 was about 53.9% of that in the world. Through the introduction of foreign advanced production technology and management experience, China's product quality has been increasingly optimized and the localization rate has been gradually improved;
From the perspective of industry structure: decorative base paper industry cr474%, Qifeng New Material Co.Ltd(002521) , Hangzhou Huawang New Material Technology Co.Ltd(605377) , Xianhe Co.Ltd(603733) and Lunan new materials occupy the main market share with strong production capacity, high product stability and rich sales channels;
Multiple factors support the growth of demand for decorative base paper: after the 21st century, the development of China State Construction Engineering Corporation Limited(601668) industry promotes the rise of furniture, flooring and wooden door manufacturing industry, the transformation of stock houses, the shortage of wood, and the improvement of plywood manufacturing process and pressing sector technology are all factors that increase the demand for wood-based panel substrate and its veneer materials. The capacity release broke through the capacity bottleneck, and the European market and wood pulp trade strengthened the profitability elasticity.
Production capacity: at present, the company has two production bases in Hangzhou and Ma'anshan, and six global advanced decorative base paper production lines. By 2021, the production capacity of high-end decorative base paper is 220000 tons / year, accounting for more than 20% of the market; The second 50000 T / a decorative base paper production line of the "120000 T / a decorative base paper production line construction project" in Maanshan is expected to be put into operation in early 2022. In addition, the "180000 T / a special paper production line expansion project (phase I)" in Maanshan will also be accelerated;
High product stability, excellent cost control ability, deep cultivation of medium and high-end customized decorative base paper, helping to expand the European market: 1 The high stability of products comes from the world's advanced production equipment, high R & D investment and high-quality raw materials; 2. Excellent cost control ability comes from scientific production scheduling management, scale advantages and process technology advantages; 3. Deeply cultivate medium and high-end customized decorative base paper to help develop the European market. The company's products are exported to Europe, the Middle East, Southeast Asia and other countries. It is one of the few companies in China that can directly compete with European and American decorative base paper enterprises. In 2020, the company's export business accounted for about 11%, which is expected to gradually increase in the future.
Profit forecast and Valuation: the company's products have high stability, the penetration rate of medium and high-end decorative base paper is expected to increase, and there is huge room for expansion in foreign markets. With the gradual release of production capacity, the company has a large growth space. It is estimated that the net profit attributable to the parent company in 21-23 years will be RMB 450 / 5.0 / 610 million respectively, with a year-on-year increase of 73% / 12% / 20%. It is given a 22-year 14 times PE valuation and a target price of RMB 21.07. It is given a "buy" rating for the first time.
Risk warning: price fluctuation risk of main raw materials; The risk that wood pulp depends on imports and suppliers are relatively concentrated; Market demand fluctuation risk.
