\u3000\u3 Shengda Resources Co.Ltd(000603) 115 Nantong Haixing Electronics Co.Ltd(603115) )
Event: on April 20, 2022, the company released its 2021 annual report. In 2021, the company achieved a revenue of 1.645 billion yuan, a year-on-year increase of 35.01%; The net profit attributable to the parent company was 221 million yuan, a year-on-year increase of 75.87%; Net profit deducted from non parent company was 274 million yuan, with a year-on-year increase of 111%. In 2021q4, the company achieved a revenue of 431 million yuan, a year-on-year increase of 24.55% and a month on month increase of – 1.31%; The net profit attributable to the parent company was 62 million yuan, an increase of 78% year-on-year and – 14% month on month; Net profit deducted from non parent company was 58 million yuan, with a year-on-year increase of 102% and a month on month increase of – 15%. The final performance is at the upper limit of the performance forecast, and the company plans to pay a cash dividend of RMB 0.75 per share (including tax).
The increase in the volume and price of electrode foil will help the growth in 2021. (1) Volume: the production and sales volume of products increased year-on-year. The company produced 30.37 million square meters of foil in the whole year, with a year-on-year increase of 24.58%; The sales volume was 30.09 million square meters, a year-on-year increase of 23.21%. (2) Price and cost: the product price rises and the gross profit margin rises steadily. We estimate that the selling price of chemical foil will increase by 7.5% in 2021, and the gross profit margin of chemical foil will increase by 4.47 PCT year-on-year, providing an increment for the company’s profits. (3) Structure: high-end products are in large quantity. 21h1 company has completed the development of electrode foil products for solid-state aluminum electrolytic capacitors in the field of automotive electronics and began small-scale trial production. At the same time, ultra-high specific capacitance electrode foil products in 5g field have entered the stage of mass production, indicating that the company’s products are transforming into high-end products, and the company’s profitability will continue to strengthen in the future. (4) Others: operating cash flow increased by 466.78% year-on-year, far exceeding the growth rate of revenue, mainly benefiting from the continuous improvement of downstream prosperity and the continuous enhancement of upstream bargaining power under tight supply and demand.
In 2022q1, the net profit attributable to the parent company increased year-on-year and remained the same month on month. It is expected that the future performance will increase quarter by quarter with the project reaching production. The company expects to realize a net profit attributable to the parent company of 622656642656 million yuan in 2022q1, with a year-on-year increase of 105.73% to 112.34%, unchanged month on month. Deduct non net profit of 56.81 to 58.81 million yuan, with a year-on-year increase of 104.27% to 111.46%, and a month on month change of – 2.06% to 1.39%. We believe that the company’s performance is flat month on month, mainly because the volume and price have not increased yet. It is expected that the future performance will increase quarter by quarter with the project reaching production.
The world’s leading enterprises in electrode foil have benefited from the development opportunities of new energy under the continuous expansion of production, and the future growth path is clear. The company is one of the “top 100 enterprises of electronic components in China”. At present, it has a foil production capacity of about 30 million square meters, and its scale ranks among the top in the world. In 2021, the growth in the field of new energy boosted the reversal of capacitor demand, and the company’s electrode foil business ushered in a simultaneous rise in volume and price. We expect that the demand for global foil will be mainly driven by emerging application fields (electric vehicles, charging piles, photovoltaic wind power, 5g, etc.). The company’s raised investment project is expected to add about 15.7 million square meters of foil production capacity (applied to 5g, new energy, automotive electronics, etc.), Ningxia Haili Electronics will expand 19 million square meters, the global market share is expected to further increase, and the proportion of products in emerging application fields in the company’s product structure may further increase. We believe that with the continuous expansion of the company’s production, the future growth path is clear and the performance is expected to be released simultaneously.
Investment suggestion: the company is a leading global foil forming enterprise, and in the next two years, the capacity scale will maintain rapid growth, the product structure will continue to improve, the gross profit margin is expected to continue to optimize, and the growth path of the company is clear. We expect that the company will realize a net profit attributable to the parent company of 337 million yuan, 414 million yuan and 540 million yuan from 2022 to 2024, with EPS of 1.41 yuan, 1.73 yuan and 2.26 yuan respectively. The PE corresponding to the closing price on April 20 is 15, 12 and 9 times respectively, maintaining the “recommended” rating.
Risk tip: the product price has fallen sharply, and the progress of raised investment projects is less than expected and the demand is less than expected.
