\u3000\u3 Guocheng Mining Co.Ltd(000688) 106 Suzhou Jinhong Gas Co.Ltd(688106) )
On March 26, Suzhou Jinhong Gas Co.Ltd(688106) released the annual report of 2021. The company achieved a revenue of 1.741 billion yuan in 2021, an increase of 40.05% year-on-year; The net profit attributable to the parent company reached 167 million yuan, a year-on-year decrease of 15.34%. Corresponding to 21q4, the company achieved a revenue of 507 million yuan, a year-on-year increase of 47.57% and a month on month increase of 11.53%; The net profit attributable to the parent company reached 41 million yuan, a year-on-year decrease of 24.15% and a month on month increase of 7.15%.
The sales scale continues to expand, and the company’s business grows across the board Suzhou Jinhong Gas Co.Ltd(688106) products cover more than 100 kinds of gases in three categories: bulk gas, special gas and natural gas. A gas supply and service network with rich categories, reasonable layout and reliable distribution has been established. In 2021, it acquired 8 gas companies and contributed 185 million yuan of revenue, which increased significantly. In 2021, the revenue of bulk gas reached 699 million yuan, a year-on-year increase of 44.97%, that of special gas reached 659 million yuan, a year-on-year increase of 46.9%, and that of natural gas reached 233 million yuan, a year-on-year increase of 65%; In terms of gross profit margin, the gross profit margin of bulk gas reached 27.21%, a year-on-year decrease of 10.91pct, the gross profit margin of special gas was 35.46%, a year-on-year decrease of 2.72pct, and the gross profit margin of natural gas was 10.73%, a year-on-year decrease of 7.82pct. The reason for the decline in gross profit margin is that the continuous transmission of commodity price rise pressure leads to the increase of operating costs.
We will strengthen market development and make phased progress in raising investment projects. The company has expanded its sales team, increased its market share, cut its products into the supply chain of key customers, and set a new high in revenue. The company’s ultra-pure ammonia, high-purity nitrous oxide and other products are officially supplied to sk Hynix Semiconductor, Semiconductor Manufacturing International Corporation(688981) , and signed on-site gas production contracts with Tenghui photovoltaic, Guangdong Golden Glass Technologies Limited(300093) and Huasheng photovoltaic. At present, it has served 14 hydrogenation stations or internal skid stations with jiahydrogen industry, Chery Wanda, Petrochina Company Limited(601857) , China Petroleum & Chemical Corporation(600028) and other companies. In November 2021 and February 2022, the company signed supply contracts with northern integration and xinyueneng to supply electronic bulk gas and open a wide new business field of electronic bulk gas. In 2021, the projects invested by raising funds made phased progress, and the production capacity was about to increase significantly. The hydrogen project for VLSI was accepted and officially put into operation; The project of annual filling of 3.922 million bottles of industrial gas is in trial production; The annual filling of 1.25 million bottles of industrial gas project has been accepted and officially put into operation; The project with an annual output of 1680 tons of tetraethyl orthosilicate has been successfully put into trial production and is under completion acceptance.
Continue to increase R & D investment, take the lead in technology and promote domestic substitution. The company attaches importance to R & D and continues to maintain its leading technology. In 2021, the R & D cost was 70 million yuan, with a year-on-year increase of 50.48%. The electronic grade monofluoromethane, electronic grade hexafluorobutadiene and electronic grade octafluorocyclobutane projects of the company have passed the new product and technology appraisal of Jiangsu Province, and the product technology is at the international advanced level. Electronic grade hydrogen bromide and electronic grade octafluorocyclobutane products are listed in the catalogue of new technologies and products to be popularized and applied. The successful trial production of electronic grade tetraethyl orthosilicate for integrated circuits indicates that the company has taken another solid step in solving the problem of “neck sticking” in the industry. According to the company’s annual report in 2021, it will face the market and carry out large-scale production in the near future to promote the domestic substitution of electronic materials for integrated circuits.
Investment suggestion: we predict that the net profit attributable to the parent company in 22 / 23 / 24 is expected to reach 288 / 408 / 546 million yuan, corresponding to 39 / 28 / 21 times of PE in 22 / 23 / 24. The company has strengthened market development, made major breakthroughs in electronic bulk gas projects and increased R & D investment. It can maintain the “recommended” rating in the future.
Risk warning: price fluctuation of raw materials; Intensified market competition; The prices of major products fell.
