\u3000\u3000 Shandong Sinocera Functional Material Co.Ltd(300285) (300285)
Event: the company released the performance forecast for 2021. In the 21st year, the company expects to realize the net profit attributable to the parent company of RMB 784-824 million, with a year-on-year increase of 37% – 44%, and it is expected to deduct the net profit not attributable to the parent company of RMB 685-721 million, with a year-on-year increase of 27% – 34%. Among them, Q4 is expected to realize a net profit attributable to the parent company of RMB 183-223 million in a single quarter, with a year-on-year increase of 16% – 41% and a month on month change of – 12% – 8%.
Comments:
The three sectors went hand in hand, and the company’s performance grew rapidly: in the past 21 years, the epidemic situation in China was generally stable, the market demand gradually recovered, and the company’s businesses were steadily promoted. In the electronic materials sector, the downstream demand of MLCC powder increased steadily, and the orders increased continuously. In terms of catalytic materials, the “sixth national” emission standard has helped honeycomb ceramic products to be delivered in large quantities, increased product sales and achieved prosperous supply and marketing. In terms of biomedicine, the subsidiary Shenzhen aierchuang completed the capital increase, and the business performance of dental materials increased. The three sectors continued to make efforts to promote the rapid growth of the company’s performance in 21 years. In addition, the company’s non recurring profit and loss in 21 years was about 99-103 million yuan, with a year-on-year increase of 186% – 199%, mainly due to government subsidies and financial management income, which contributed to some performance.
Downstream demand continued to improve, and the electronic materials sector made steady efforts: with the development of 5g and new energy vehicle industry, the company, as an upstream MLCC powder supplier, fully benefited from the expansion of production capacity by downstream customers. The investment scale of the company’s raised investment project “dielectric materials for ultra micro chip multilayer ceramic capacitors” is adjusted to 398 million yuan (original 280 million yuan), and the planned capacity is increased to 5000 tons / year (original 2500 tons / year). The company’s existing MLCC formula powder production capacity is 10000 t / A, which remains at full capacity. It is planned to reach 15000 T / a by the end of 2022. In terms of electronic paste, it has a high degree of customer collaboration with MLCC powder material business. In addition, the company uses core technologies such as hydrothermal synthesis to obtain nano zirconia materials, and also produces high thermal stability alumina products for lithium battery diaphragm coating.
Honeycomb ceramic products have entered the mass production stage, and the catalytic material business continues to grow: with China’s comprehensive entry into the “national six” era, the company’s honeycomb ceramic products continue to be mass produced. It is expected that from the end of 22 to the beginning of 23, the company’s honeycomb ceramic carrier capacity will be expanded to 50 million liters / year, and the business scale will be further expanded. At present, the company has achieved full coverage and stable supply of “national six” standard products. After the company’s “3000 ton high-performance rare earth functional material industrialization project” is put into operation, it can produce cerium zirconium solid solution catalytic materials, which helps the company to continuously consolidate its position in the catalytic material industry. Profit forecast, valuation and rating: the industry demand continues to improve and the company’s business segments continue to increase. Therefore, we raise the company’s profit forecast. It is estimated that the company’s net profit from 2021 to 2023 will be 801 million yuan (up 6%) / 1047 million yuan (up 11%) / 1283 million yuan (up 13%), equivalent to EPS of 0.8/1.04/1.28 yuan, maintaining the “overweight” rating.
Risk warning: downstream demand is less than expected; The new project was put into operation less than expected.
