\u3000\u3 Shengda Resources Co.Ltd(000603) 067 Hubei Zhenhua Chemical Co.Ltd(603067) )
Event: in 21 years, the operating revenue was 2.99 billion yuan, a year-on-year increase of + 134.1%, and the net profit attributable to the parent company was 310 million yuan, a year-on-year increase of + 107.3%. Among them, Q4's operating revenue was 670 million yuan, a year-on-year increase of + 88.3%; The net profit attributable to the parent company was 63 million yuan, a year-on-year increase of + 173.4%. In 2022, Q1 achieved an operating revenue of 790 million yuan, a year-on-year increase of + 18.4%, and a net profit attributable to the parent company of 100 million yuan, a year-on-year increase of + 173.3%, exceeding market expectations.
Comments: both volume and price have risen, with high performance in 21 years. Benefiting from the integration of Minfeng, the production and sales volume of the company increased significantly, the sales volume of the three main products increased by more than 80%, the production and sales volume increased, the price increased steadily, and the performance of the company increased significantly in the 21st century. The average price of main products of 22q1 company increased by 30% year-on-year, while the sales volume decreased to varying degrees, mainly due to the impact of the epidemic in the first quarter on the production of downstream electroplating and VK3 production enterprises, coupled with export restrictions, but the company's performance still doubled or more when the product price remained high. Looking forward to the whole year, with the gradual improvement of the epidemic situation, the downstream demand is expected to recover. Considering that chromium salt is a rigid demand, the company's sales volume is still expected to maintain positive growth throughout the year.
Collaborative management, efficiency and cost reduction, and the cost rate has decreased significantly. In 21 years, the gross profit margin of the company was 24.96%, with a year-on-year decrease of 5.25 PCT and net profit margin of 10.42%, with a year-on-year decrease of 1.42 PCT, mainly because the gross profit margin of Minfeng's overall products, a subsidiary, was lower than that of the company, but the company still achieved a significant decrease in the expense rate by virtue of effective management, and the net profit decreased by only 1.42 PCT.
The pattern was optimized, the cost transmission was smooth, and the gross profit margin expanded steadily. After the Russia Ukraine incident this year, the prices of bulk commodities dominated by oil rose sharply, and the raw materials in the upstream of the industry also rose. The optimization of the industry pattern made the costs transmitted to the downstream in an orderly manner. The gross profit curve of sodium dichromate has maintained an upward trend since August 21. At present, it has reached 8363 yuan / ton, which is at a good historical level. Zhenhua's pricing power has gradually emerged.
Investment suggestion: in the medium and long term, the company actively expands the use of chromium salt in emerging fields, which is expected to open the growth ceiling. We expect the company to realize a net profit attributable to the parent company of RMB 5.0/6.0/720 million in 22-24 years, corresponding to 11 / 9 / 7 times of PE, maintaining the "buy" rating.
Risk tips: integration risk, environmental protection risk, raw material supply risk, covid-19 epidemic risk
