\u3000\u3 China Vanke Co.Ltd(000002) 831 Shenzhen Yuto Packaging Technology Co.Ltd(002831) )
Looking at the three development stages of the company, the business layout reflects the strategic vision. Looking back on the past development of the company, Mr. Wang Huajun, chairman of the board, led the company to undergo several transformations, and the results of previous strategic adjustments have witnessed the foresight and timeliness of the company’s business layout. Relying on the three core advantages of strong R & D technology, stable flexible supply capacity and multi network layout service system, the company has gradually developed into a leader in the packaging industry. Today, the company has become one of the leading players in many fields in the large packaging sector. It is also in line with the development trend of the industry and the growth of the enterprise. In the future, it is expected to continue to develop new customers and expand growth space. As of October 2021, it has 80 subsidiaries and 7 branches, with production bases in East China, South China, North China, central China, Southwest China, Vietnam, India, Indonesia, Thailand and other places, and service centers in the United States, Australia, Hong Kong and other regions to provide services to customers around the world.
Three logical recommendations: 1) steady expansion of revenue expectation and remarkable results in large packaging layout. In recent years, the company has continuously strengthened the market development of new consumer electronics customers, tobacco and alcohol, environmental protection packaging and cosmetics, and successfully introduced Maotai, Luzhou Laojiao Co.Ltd(000568) , Yanghe, Sichuan Swellfun Co.Ltd(600779) , Yunnan Zhongyan, Hubei Zhongyan, Hunan Zhongyan, Fujian Zhongyan and other important brand customers. Environmental protection packaging production base – Yibin Yutong and Hainan environmental protection packaging projects have been promoted. In the field of environmental protection packaging, the company has realized the all-round layout of brand globalization promotion, industrial chain extension, equipment and material research and development, and production bases outside China. By the first three quarters of 2021, the proportion of ICT packaging business in the company’s revenue had decreased to 63%, and wine bags, cigarette bags and environmental protection packaging accounted for 10%, 5.5% and 4.5% respectively, which has become an important growth pole of the company. The acquisition of Renhe intelligence has cut into the soft package field and has obvious synergy with the company’s business, which is expected to add further development momentum.
2) profit bottoming and improvement can be expected. On the cost side, affected by multiple factors such as the sharp rise in raw material costs, the epidemic and the shortage of chips in the consumer electronics industry last year, the company’s gross profit margin fell, dragging down its profit performance. Since the second half of last year, with the decline of raw material costs, 3q21’s single quarter gross profit margin has been 22.96%, up 4.40pct month on month, and the net profit margin has been 8.28%, up 3.29pct month on month. In addition, in the 21st year, Xuchang intelligent factory was officially put into operation, fully opening up the business flow from raw material warehouse, post press workshop, semi-finished product warehouse, assembly workshop to finished product warehouse, and constantly strengthening the factory’s ability to deliver stable large single products and rapid response to small batch customized products. The labor cost is expected to decrease by 50%, improve operation efficiency, and deepen the strategic cooperation relationship with customers. Looking forward to the future, we believe that the profitability of the company is expected to be gradually improved under the multiple driving forces of alleviating the pressure of raw material cost, optimizing cost control and saving capital expenditure.
3) it is at a low level of historical valuation, and the configuration value of packaging leader is obvious. 1) The company ranks first in the field of consumer electronic packaging, leading the industry in product quality, supply capacity and global production capacity layout. The company has significant advantages in the field of consumer electronic packaging, and imports new customers quickly; 2) Large packaging sectors such as tobacco and alcohol, environmental protection packaging and cosmetics have achieved remarkable results and have formed a new growth pole; 3) The cost pressure is relieved, the superposition efficiency is optimized, and the profitability is expected to be gradually improved; 4) Leading enterprises have the advantages of resource integration and open up growth space. Following the repurchase of 100 million yuan of shares in 2018 and 2019, the company launched a share repurchase plan of 100 million yuan to 200 million yuan in September 21, which fully shows its firm confidence in future development. We estimate that the net profit attributable to the parent company from 2021 to 2023 will be 1.232 billion yuan, 1.634 billion yuan and 2.013 billion yuan respectively, with a year-on-year increase of 10%, 32.6% and 23.2% respectively. At present, the (2022 / 4 / 1) share price corresponds to 15x PE in 2022, which is at a low level of historical valuation. The “buy” rating is given for the first time.
Risk factors: the price fluctuation of raw materials and the risk that the expansion of customers is less than expected
