\u3000\u30 Guangdong Tengen Industrial Group Co.Ltd(003003) 43 Lecron Industrial Development Group Co.Ltd(300343) )
On the evening of April 19, 2022, Lecron Industrial Development Group Co.Ltd(300343) released the annual report of 2021 and the first quarter report of 2022. In 2021, the company achieved an operating revenue of 1.835 billion yuan, a year-on-year increase of 5.56%; The net profit attributable to the shareholders of the listed company was 288 million yuan, a year-on-year increase of 375 million yuan. In the first quarter of 2022, the operating revenue was 611 million yuan, a year-on-year increase of 83.90%; The net profit attributable to the shareholders of the listed company was 308 million yuan, a year-on-year increase of 220811%.
Key investment points:
PVDF was put into operation in time under the new energy industry tuyere, bringing new performance growth points to the company: in 2021, Lecron Industrial Development Group Co.Ltd(300343) completed the stripping of Internet business and returned to the main chemical industry. The annual operating revenue of the Internet sector was 940966 million yuan, accounting for 5.13%, resulting in a net profit of – 256404 million yuan. The new chemical materials sector achieved an operating revenue of 1.741 billion yuan, of which the new polyurethane materials sector achieved an operating revenue of 732 million yuan, with a year-on-year increase of 16.95% and a gross profit margin of 6.89%, a year-on-year decrease of 0.68 PCT. The fluorine-containing new materials sector achieved an operating revenue of 1.009 billion yuan, a year-on-year increase of 127.47%, and the gross profit margin of the sector was 67.13%, a year-on-year increase of 57.53pcts. The fluorine-containing new materials sector and the company’s comprehensive performance increased significantly year-on-year, mainly due to the accelerated development of the new energy industry during the reporting period, the explosion of downstream demand for lithium grade PVDF and its raw material R142b, the phased serious imbalance between the supply and demand structure of the two types of materials, and the soaring price. According to the data of Baichuan Yingfu, as of December 31, 2021, the average market price of R142b was 185000 yuan / ton, a year-on-year increase of 560.71%; The average market price of lithium grade PVDF was 445000 yuan / ton, up 304.55% year-on-year. The annual production capacity of Huaan foreign holding company is 12.62 million tons, and the annual production capacity of R12 / B is 12.62 million tons. In the second half of 2021, the company successfully put into production 3000 tons of PVDF, self-sufficient raw material R142b, stable technical indicators of products, effective release of production capacity, and capacity utilization rate of about 75%. Both of them contributed considerable performance increment to the company in 2021. However, the net profit level of the company in 2021 is lower than our previous expectations. We think the main reasons are as follows: 1 During the reporting period, the company accrued a total of credit impairment loss, asset impairment loss and asset disposal loss of more than 130 million yuan, which accounted for 38.79% of the net profit in 2021; 2. In the fourth quarter, the company conducted equity incentive for 154 senior executives, core managers and core technical backbones, and confirmed the equity incentive fee, resulting in the company’s management fee of 89.78 million yuan in the fourth quarter, an increase of more than 69.08 million yuan compared with the third quarter.
R142b and PVDF prices remain high, and the performance in 2022 is expected to continue to rise significantly: in 2022, the rapid and large-scale volume of new energy vehicles continues, the proportion of lithium iron phosphate batteries continues to increase, the demand for lithium battery grade PVDF accelerates, and the prices of R142b and lithium battery grade PVDF continue to remain high. According to the data of Baichuan Yingfu, as of April 19, the average market price of R142b was 180000 yuan / ton, and the average market price of lithium grade PVDF was 490000 yuan / ton, which enabled the company to maintain a high-speed growth trend in the first quarter of 2022. And the company has officially entered the supply chain system of Contemporary Amperex Technology Co.Limited(300750) to provide lithium battery grade PVDF and R142b products. It not only proves that the PVDF quality of the company has been certified by the authority, but also helps to form a close supply-demand linkage between the company and the upstream and downstream of the industry, realize long-term mutual benefit and win-win results, and then improve the profitability of the company. In the first half of 2022, the company’s 5000 t / a production capacity of pvdf2 phase will be put into operation, which will also effectively promote the company’s performance to maintain a high growth trend. However, considering that since March, the epidemic situation in Shandong, where the company belongs, Contemporary Amperex Technology Co.Limited(300750) Fujian, and Shanghai, where many new energy vehicle factories are located, has erupted again, and many enterprises have stopped production in stages, which may have a negative impact on the production and marketing progress of PVDF and R142b in the short term.
Profit forecast and investment suggestions: considering that many enterprises have accelerated the layout of PVDF integrated production capacity since 2021, PVDF and R142b will usher in the centralized release period of new production capacity, and the subsequent product prices may accelerate to fall back to the rational range with the improvement of supply and demand structure. Superimposed with the risk of repeated epidemic or lower than expected downstream demand, we lowered the profit forecast for the company from 2022 to 2023 and added the profit forecast for 2024. It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be 1.27/14.8/1.5 billion yuan respectively, and the corresponding P / E will be 11.1/9.5/9.4 respectively (corresponding to the closing price of 12.28 yuan on April 19), which is adjusted to the “overweight” rating.
Risk factors: the risk of limited commencement of products affected by environmental protection policies; Risk that the construction progress of PVDF and other projects is less than expected; Risk of sharp fluctuation of product price; The downstream demand caused by the epidemic is lower than the expected risk; The accounting firm issued non-standard audit opinions on some subjects of the company’s 2021 annual report, and the corresponding matters have the risk of having a significant impact on the company’s operation in 2021.
