\u3000\u30 Chongqing Baiya Sanitary Products Co.Ltd(003006) 99 Weihai Guangwei Composites Co.Ltd(300699) )
Key elements of the report:
On April 12, 2022, Weihai Guangwei Composites Co.Ltd(300699) issued the annual report for 2021. In 2021, the company achieved an operating revenue of 2.607 billion yuan, a year-on-year increase of 23.25%; The net profit attributable to the shareholders of the listed company was 758 million yuan, a year-on-year increase of 18.18%. On the same day, the company announced the performance forecast for the first quarter of 2022. The company expects to achieve a net profit of 207 million yuan attributable to shareholders of Listed Companies in the first quarter of 2022, with a year-on-year decrease of 5.37%.
Key investment points:
The production line of high-end carbon fiber project was put into operation, the development of wind power prepreg was smooth, and the annual performance maintained steady growth: Quarterly, the company Q4 achieved an operating revenue of 645 million yuan, a year-on-year increase of 25.82% and a month on month decrease of 5.11%; The net profit attributable to the parent company was 140 million yuan, a year-on-year increase of 19.5% and a month on month decrease of 23.9%. Q4 performance fell month on month and the annual profit growth was less than the revenue growth, which was mainly due to the decline in the price of finalized carbon fiber products in the second half of the year and the sharp rise in the price of carbon beam raw materials such as carbon fiber and resin. In terms of business segments, the company’s carbon fiber and fabric business achieved a revenue of 1.275 billion yuan in 2021, with a year-on-year increase of 18.32% despite the decline in the prices of some products in the second half of the year, mainly due to the continuous mass production and delivery of the new capacity of T700 and MJ series products in the company’s fund-raising projects during the reporting period, forming a new performance growth point; At the same time, T800 series products also achieved confirmatory mass production and delivery during the reporting period, contributing to a certain performance, but the final acceptance has not been completed yet. In terms of prepreg business, during the reporting period, the carbon fiber semi prepreg applicable to the manufacturing field of wind power blades of the company began to contribute revenue, which contributed to the main performance growth of the sector. The annual prepreg business achieved a total sales revenue of 359 million yuan, a year-on-year increase of 51.94%. In terms of carbon beam business, affected by the rising price of raw materials and the shortage of supply during the reporting period, the delivery of phased orders was blocked and the profitability decreased significantly. In the second half of the year, it was alleviated by the measures of the company to strengthen management and develop new resources. The annual carbon beam business achieved a total operating revenue of 808 million yuan, a year-on-year increase of 12.56%, and the gross profit margin fell to 15.07%, a year-on-year decrease of 5.49 PCTs.
Affected by the epidemic and other factors, the company’s 2022q1 performance declined slightly: according to the company’s performance forecast, the 2022q1 company is expected to realize a net profit attributable to the shareholders of the listed company of 207 million yuan, which is expected to decrease by 5.37% year-on-year. There are three main reasons: 1. The price of finalized carbon fiber products decreased year-on-year, affecting the profitability of the sector; 2. In March, the covid-19 epidemic situation in Weihai City worsened in stages. Some business segments of the company stopped production and interrupted logistics during the period from March 9 to March 23, which affected the production and operation of the company in stages. As of the release date of the report, relevant businesses have resumed normal operation, and the production plan has been adjusted in time to make up for the losses in the early stage; 3. The phased order of wind power prepreg with large contribution in the same period of last year ended, resulting in a significant year-on-year decline in the performance of prepreg sector.
The raised investment project is progressing smoothly, large orders are signed again, and the downstream demand is improving, which effectively ensures the steady growth of the company’s performance: on December 31, 2021, the company announced that it signed a large order with a total price of about 2.098 billion yuan with customer a for carbon fiber and fabric, with a performance period of 2.5 years, which is the order with the highest amount and the longest time span in the company’s previous contracts. The company has successively signed large orders, which fully shows the continuous improvement of downstream demand, and the quality of the company’s products is recognized by customers. At present, the company still has 1.7 million meters of carbon beams and 5030 tons of carbon fiber under construction, and another 850000 square meters of prepreg will be put into use. The new capacity is expected to be put into operation in 2022, and the company’s advanced composite R & D center has been put into use in the second reporting period. In the future, the product structure of each business segment of the company will be continuously optimized, and the investment of new production capacity will effectively meet the demands of downstream expanding and high-end products, so as to provide guarantee for the company’s performance growth and consolidate the company’s leading position in the field of domestic carbon fiber.
Profit forecast and investment suggestions: the company is expected to realize a net profit attributable to the parent company of RMB 9.9/12.9/1.51 billion from 2022 to 2024, with a corresponding P / E of 27.3/21.0/17.9 times (closing price of RMB 52.08 on April 11). Considering that the company’s main business has long-term growth power, and the company’s valuation and share price have fallen sharply in the recent stage, which has a certain growth space, we raised the rating to “buy”.
Risk factors: the risk of sharp fluctuations in the price of raw materials; Risk of repeated outbreaks and decline in operating rate; Risk that the construction progress of capacity under construction is less than expected.
