\u3000\u3 Shengda Resources Co.Ltd(000603) 225 Xinfengming Group Co.Ltd(603225) )
Event: on April 14, 2022, Xinfengming Group Co.Ltd(603225) released the annual report of 2021: the operating revenue was 44.770 billion yuan, an increase of 21.05% year-on-year; The net profit attributable to the parent company was 2.254 billion yuan, a year-on-year increase of 273.77%; The weighted average return on net assets was 13.72%, an increase of 8.72 percentage points year-on-year. The gross profit margin of sales was 10.51%, with a year-on-year increase of 5.44 percentage points; The net profit margin of sales was 5.03%, an increase of 3.40 percentage points year-on-year. The net cash flow from operating activities was 3.143 billion yuan, a year-on-year decrease of 1.28%.
Among them, Q4 achieved a revenue of 8.201 billion yuan in 2022, a year-on-year increase of - 41.11% and a month on month increase of - 36.37%; The net profit attributable to the parent company was 320 million yuan, with a year-on-year increase of - 6.90% and a month on month increase of - 47.65%;
The weighted average return on net assets was 1.97%, down 0.93 percentage points year-on-year and 2.15 percentage points month on month. The gross profit margin of sales was 10.79%, with a year-on-year increase of 4.99 percentage points and a month on month increase of 0.88 percentage points; The net sales interest rate was 3.90%, up 1.43 percentage points year-on-year and down 0.84 percentage points month on month.
Comments:
The volume and price of main products have risen simultaneously, and the company's performance has achieved rapid growth
In 2021, the company's performance ushered in a substantial growth, with a revenue of 44.770 billion yuan, a year-on-year increase of 21.05%; The net profit attributable to the parent company was 2.254 billion yuan, a year-on-year increase of 273.77%. The high-speed growth of performance mainly benefited from the continuous operation of new projects to release performance increment. Among them, Zhongyue chemical fiber project with an annual output of 300000 tons of polyester filament and Dushan energy project with an annual output of Shanghai Pudong Development Bank Co.Ltd(600000) tons of polyester filament were put into operation in April and July 2021 respectively, and the production capacity was gradually released, driving the improvement of the production and sales of the company's main products. In 2021, the company's POY sales volume reached 4048500 tons, with a year-on-year increase of 19.35%; The sales volume of FDY reached 868400 tons, with a year-on-year increase of 8.97%; DTY achieved sales of 434300 tons, a year-on-year increase of 27.29%. Meanwhile, since 2021, affected by the recovery of downstream terminal demand and the cost of raw materials, the price of polyester filament has increased significantly. In 2021, the average market price of POY reached 742277 yuan / ton, an increase of 32.81% and the price difference reached 159915 yuan / ton, an increase of 37.93%; The average market price of FDY reached 755096 yuan / ton, an increase of 26.44%, and the price difference reached 172734 yuan / ton, an increase of 12.02%; The average price of DTY Market reached 897093 yuan / ton, an increase of 23.45%, and the price difference reached 314731 yuan / ton, an increase of 10.93%. The volume and price of main products rose together, helping the company's performance to reach a new height in history. In terms of period expenses, the company's sales / management / financial expense ratio in 2021 was 0.16% / 3.22% / 1.16% respectively, with a year-on-year increase of -0.02 / + 0.58 / + 0.18pct. The increase in management expense ratio was mainly due to the increase in employee compensation and depreciation and amortization expenses. In 2021, the net cash flow from the company's operating activities reached 3.143 billion yuan, a year-on-year decrease of 1.28%. Meanwhile, the company's inventory at the end of the period reached 3.222 billion yuan, up + 92.62% from the end of the previous period, mainly due to the company's new production capacity and the adjustment of the management mode of raw materials and finished products.
Polyester filament has short-term pressure and is optimistic about medium and long-term development
Affected by the rising price of raw materials in the upstream and the sluggish operation in the downstream under the background of the epidemic, polyester filament is under pressure in the short term. In 2022q1, the average market price of POY reaches 7918.0 yuan / ton, with a year-on-year increase of + 16.63% and a month on month increase of + 1.27%; The price difference reached 139172 yuan / ton, with a year-on-year increase of -10.83% and a month on month increase of -20.79%. The average market price of FDY reached 814972 yuan / ton, with a year-on-year increase of + 16.76% and a month on month increase of + 2.78%; The price difference reached 156344 yuan / ton, a year-on-year increase of -8.05% and a month on month increase of -13.52%. The average market price of DTY reached 957778 yuan / ton, with a year-on-year increase of + 12.57% and a month on month increase of + 0.73%; The price difference reached 299150 yuan / ton, with a year-on-year increase of - 7.35% and a month on month increase of - 11.67%. In the medium and long term, the polyester filament production capacity is in an orderly expansion state, the industry concentration continues to improve, and the leading voice continues to strengthen. With the recovery of the epidemic and the recovery of downstream demand, we are optimistic that the polyester filament will maintain a long-term boom. Meanwhile, in recent years, with the gradual improvement of coal chemical technology and the continuous operation of private refineries, the self-sufficiency rate of upstream raw materials has been continuously improved. From 2020 to 2022, China invested more production capacity of PX, PTA and ethylene glycol, the upstream production capacity of the industry was released rapidly, and the supply of raw materials was relatively loose, which will be conducive to the transfer of industrial profits to the polyester end.
Polyester production capacity continued to be put into operation, and the leading position of the company was continuously consolidated
The company is a leading polyester filament enterprise in China. Its output this year ranks among the top three in China's civil polyester filament industry. By the end of 2021, the company has a filament production capacity of 6 million tons, a market share of nearly 12%, and strong comprehensive strength. At the same time, the company actively expanded horizontally, and the Shanghai Pudong Development Bank Co.Ltd(600000) T / a polyester staple fiber production capacity was also put into operation in 2021. It entered the staple fiber field for the first time, and the polyester product structure was further improved. In order to further consolidate its leading position and expand its scale advantages, the company has actively expanded its production capacity. Dushan energy pcp03 unit has been put into operation in February 2022, and the supporting filament unit is expected to be fully produced in May, with a new increase of 300000 tons / year. At the same time, Dushan energy's remaining 1.2 million T / a polyester filament production capacity and Xinyi 2.7 million T / a polyester new material integration project are also actively under construction. It is expected that by the end of 2022, the company will also invest 700000 T / a polyester filament production capacity and Shanghai Pudong Development Bank Co.Ltd(600000) T / A polyester staple production capacity. With the continuous launch of the company's new production capacity, the company's market position in the polyester field has been further improved, its scale and cost advantages have been continuously expanded, and its core competitiveness has been continuously enhanced.
Build PTA polyester filament industrial chain and steadily promote the two "10 million tons"
In order to improve the self-sufficiency rate of raw materials and create integration advantages, the company actively distributes PTA production capacity. Up to now, the company's 5 million T / a PTA has reached full capacity. The company's PTA project adopts the latest generation process technology of BP company, the level of energy and material consumption has been further improved, and the advantage of late development of equipment is obvious. In August 2021, Petrochina Company Limited(601857) and the chemical industry federation announced the ranking of PTA energy consumption indicators by the benchmark enterprises of energy efficiency "leaders" of key energy consuming products in the petroleum and chemical industry at the end of 2020. Among them, Dushan energy ranked first in PTA energy consumption and power consumption indicators. At the same time, the PTA expansion project is also continuing. At present, 4 million tons of PTA project has been planned. It is estimated that the company's PTA capacity will reach 10 million tons by 2025. With the completion and operation of the planned project, the company's integrated scale advantage of "PTA polyester" will continue to strengthen, help the company's polyester and PTA production capacity double on the basis of 2020, achieve the goal of "two 10 million tons" and enhance the certainty of the company's future growth.
Pay attention to innovation and R & D, and strive to promote technological development breakthroughs
The company adheres to innovation and R & D, and its R & D efforts continue to increase. In 2021, the company's R & D expenses reached 915 million yuan, a year-on-year increase of 51.96%. After years of technology accumulation and production practice, the company has formed a strong industry technology R & D capability, has a group of professional technology R & D personnel, and has a high technical level and rich industry experience.
In order to enhance the comprehensive competitiveness of products, the company has accelerated the development of new products and improved the differentiation rate of products. It has successfully developed differential products such as eacool moisture absorption and sweat wicking fiber, high Tex Fiber, environmental protection and anti wrinkle fiber, k-warm hollow thermal fiber, super flexible fiber and peach skin fine denier fiber. In addition to focusing on product development, the company also attaches great importance to the R & D of production technology and engineering equipment technology, and its core competitiveness is continuously enhanced.
Implement the share repurchase plan to demonstrate the company's confidence in development
On March 7, 2022, the company announced that it would implement a share repurchase plan, with a total repurchase fund of no less than 150 million yuan and no more than 300 million yuan. The shares repurchased would be used for the employee stock ownership plan. As of March 31, the company has repurchased 9.9099 million shares, accounting for 0.65% of the total share capital of the company, with a repurchase amount of 120 million yuan. The implementation of the repurchase plan shows the company's confidence in future development. At the same time, the introduction of the employee stock ownership plan will fully mobilize the enthusiasm of employees, effectively integrate the interests of shareholders, the company and employees, and promote the healthy and sustainable development of the company.
In view of the company's historical profitability and future development plan, we adjusted the company's profit forecast. It is estimated that the company's net profit attributable to the parent company in 20222023/2024 will be RMB 2.542 billion, RMB 3.394 billion and RMB 4.281 billion respectively, EPS will be RMB 1.66, 2.22 and 2.80 per share, corresponding to 7, 5 and 4 times of PE, maintaining the "buy" rating.
Risk tips: the implementation of policies, the construction progress of new production capacity is not up to expectations, the contribution performance of new production capacity is not up to expectations, the price of raw materials fluctuates, the change of environmental protection policies, the economy drops sharply, and the price of crude oil fluctuates sharply.
