\u3000\u3 Guocheng Mining Co.Ltd(000688) 269 Kaili Catalyst & New Materials Co.Ltd(688269) )
Event: the company released its annual report for 2021. In 2021, the company achieved an operating revenue of 1.589 billion yuan, a year-on-year increase of 51.1%, and a net profit attributable to the parent company of 163 million yuan, a year-on-year increase of 54.34%. In the fourth quarter, the operating revenue was 366 million yuan, a year-on-year increase of 22.6%, and the net profit attributable to the parent company was 36 million yuan, a year-on-year increase of 23.2%.
The annual performance was fulfilled, and the revenue and profit increased rapidly. In 2021, the company’s operating revenue and net profit attributable to the parent company increased by 51.1% and 54.3% respectively year-on-year. The revenue increased rapidly. First, the sales revenue of homogeneous catalysts with high unit value exceeded that of heterogeneous catalysts for the first time. Second, the company’s rapid penetration in the fields of medicine, new chemical materials and basic chemical industry. Among them, the company achieved a revenue of 366 million yuan in the fourth quarter, a year-on-year increase of 22.6% and a month on month decrease of 28.3%; The net profit attributable to the parent company was 36 million yuan, with a year-on-year increase of 23.2% and a month on month decrease of 16.2%. In the fourth quarter, due to the spread of the epidemic in Xi’an, where the company’s factory is located, some shipments were delayed, and the change of the overall product sales structure also had a great impact on the fluctuation of revenue and profit between quarters.
The revenue of homogeneous catalysts exceeded that of heterogeneous catalysts, and medicine, new materials and basic chemical industry grew rapidly. In 2021, the revenue of the company’s homogeneous catalyst business increased by 145.2% year-on-year, making a great contribution to the overall revenue growth. The revenue of pharmaceutical field and new chemical materials field increased by 44.35% / 88.7% year-on-year respectively, and the market application and promotion progress of the company’s key layout in the basic chemical field has accelerated. The product performance is gradually recognized by customers, and the revenue increased by 213.8% year-on-year. In recent years, the gross profit margin of the company’s sales and processing business has been basically the same. In 2021, the gross profit margin was 13% / 49% respectively, and the year-on-year growth rate of revenue was 59.0% / 20.0% respectively. The rapid growth of sales revenue is related to the rapid penetration of the company’s new customers and new products.
In order to implement Minamata convention, many enterprises have tried mercury free vinyl chloride catalyst. China submitted its first (full version) national report to the Secretariat of the Minamata Convention on mercury in December 2021, fulfilling the relevant time node requirements of the Convention. According to the estimation of Kaili Catalyst & New Materials Co.Ltd(688269) prospectus, the demand for mercury free catalyst in China’s PVC market is expected to exceed 10000 tons in the future, and the value of precious metal gold in mercury free catalyst is expected to exceed 4 billion yuan. Assuming that the cost of precious metals in the catalyst accounts for 90%, the total market of PVC mercury free catalyst is expected to exceed 5 billion yuan according to the gross profit margin of 13.2% of Kaili Catalyst & New Materials Co.Ltd(688269) existing sales business (precious metals are included in revenue and cost).
There are abundant research projects and broad application prospects. The company has 21 projects under research, including frontier fields such as proton exchange membrane catalyst and hydrogen storage system catalyst in hydrogen fuel cell, and projects with large market space such as PDH, coal to ethylene glycol and PVC in basic chemical industry. It has achieved rapid development during the annual report period, and Xiangxin will provide project support for the rapid growth of the company’s basic chemical industry in the future.
Profit forecast and Valuation: we expect that the company will realize a net profit attributable to the parent company of RMB 242 / 338 / 430 million from 2022 to 2024, corresponding to EPS 2.5 billion 59 / 3.62/4.61 yuan / share, maintaining the “buy” rating.
Risk warning: precious metal resource shortage and price fluctuation risk; Technology R & D iteration risk; Risk of shutdown caused by epidemic
