\u3000\u30 Jinzai Food Group Co.Ltd(003000) 19 Chengdu Guibao Science & Technology Co.Ltd(300019) )
Key investment points
The sales volume increased significantly and the gross profit margin fell to the bottom of history
The substantial growth of the company’s revenue is mainly due to the substantial growth of silicone sealant sales. We estimate that the company’s sales volume in the first quarter is expected to exceed 30000 tons, with a significant year-on-year increase. According to the data of Baichuan Yingfu, the average price of the company’s raw material 107 glue Q1 was 33500 yuan / ton, a sharp increase of 42.3% year-on-year and a decrease of 13.2% month on month. The increase in cost led to the company’s Q1 gross profit margin falling to 15.68%, a decrease of 7.4pct month on month and 9.79pct year-on-year. The revenue increased significantly, and the expense rate of the company decreased significantly to 7.4%, a year-on-year decrease of 9.78pct. The company’s accounts receivable were 694 million, a year-on-year increase of 1 times. The impairment of accounts receivable increased by 8.6 million year-on-year mainly due to the significant growth of sales volume and the company’s seizing market share. The company’s inventory turnover rate and accounts receivable turnover rate remained stable year-on-year.
The cost pressure is expected to ease gradually and the company’s market share will increase rapidly.
Recently, the tax price of metal silicon market is 20500 yuan / ton, and the higher point has fallen sharply. According to the data of Baichuan Yingfu, the new capacity of silicone in 2022 is more than 650000 tons, with a year-on-year increase of more than 20%. With the release of the capacity of upstream companies, it is expected that the price of 107 glue will continue to adjust in the second quarter, the cost pressure will be relieved, and the profitability of the company is expected to bottom out and rise. After completion, the company will become the largest silicone sealant production company in China with a total production capacity of 200000 tons. The price fluctuation of raw materials and products and the decline of profitability led to the withdrawal of small and medium-sized enterprises in the industry. According to sagsi data, China’s demand for silicone room temperature adhesive is 1 million tons in 2021. Based on this calculation, the company’s market share is about 13%, significantly higher than that in the previous two years. With the increasing concentration of real estate developers, the construction glue market will be concentrated to the head company, and it is expected that the company’s market share will still have great room for improvement. In addition to building adhesives, the import substitution of industrial adhesives has accelerated, and the company is also actively deploying new products such as lithium battery adhesives and silicon carbon negative electrodes. We believe that the company still has great development space and is expected to maintain rapid growth in the future.
The layout of silicon carbon negative electrode meets the new growth, and the company has great room for development in the future.
On November 10, 2021, the company announced that it planned to invest 560 million yuan to build a 10000 t / a silicon carbon cathode material for lithium battery and a 40000 t / a special adhesive project. The project is constructed in two phases. The first phase is completed and put into operation within 30 months, and the second phase is completed and put into operation within 12 months after the first phase is put into operation. The energy density of silicon carbon negative electrode material is significantly higher than that of traditional graphite negative electrode material, which has great application potential. The company began to independently develop silicon carbon cathode materials in 2016, and built a 50 t / a pilot production line in 2019. At present, the products have passed the sample delivery and testing of downstream customers to realize small batch supply. At the same time, the company signed a cooperation agreement with Contemporary Amperex Technology Co.Limited(300750) in August 2021 to jointly develop protective sealing materials for batteries and their packages, including but not limited to heat conduction, sealing, shock absorption, insulation and other new materials to improve battery performance. At present, the market is worried about the downturn of the real estate industry chain, but we believe that with the increase of real estate concentration, the construction glue market will focus on the head company, and the company will continue to increase its market share with good brand awareness and strong market competitiveness. In addition, with the gradual launch of the company’s new industrial rubber production capacity, the company will fully benefit from the rapid increase in the demand for photovoltaic and lithium batteries. The company still has large development space and is expected to maintain rapid growth in the future.
Profit forecast and valuation
We maintain the company’s EPS forecast from 2022 to 2024 to 0.96/1.31/1.73 yuan, and the current price corresponding to PE is 17.13/12.51/9.50 times respectively. Environmental protection and fine decoration by real estate developers have promoted the market concentration of construction glue. The company is the first-line leader in China, and there is great room to improve its market share. Industrial rubber import substitution market is large, and the company has broad development space. Maintain the “buy” rating.
Risk tips
The impact of macroeconomic regulation and control; The price of raw materials fluctuates greatly; The expansion of new fields did not meet expectations; Accounts receivable risk, etc.
