\u3000\u30 Xuchang Ketop Testing Research Institute Co.Ltd(003008) 56 Nanjing Cosmos Chemical Co.Ltd(300856) )
Performance description: in 2021, the company achieved revenue of 1.090 billion yuan / yoy + 8.13% and net profit attributable to parent company of 132 million yuan / yoy-18.72%, of which Q4 achieved revenue of 348 million yuan / yoy + 40.53% and net profit attributable to parent company of 21 million yuan / yoy-52.82%.
Overseas demand recovery + China’s sunscreen market is booming, and the two businesses are growing at the same time. The revenue growth is mainly due to the company’s full grasp of the opportunities of overseas demand recovery, Chinese sunscreen demand recovery and the vigorous development of domestic brands. By Region: in 2021, the company achieved revenue of 194 million yuan / yoy + 59.49%, accounting for 17.83% / yoy + 5.74pct of revenue in China, and 895 million yuan / yoy + 1.06% of revenue abroad, accounting for 82.17% of revenue. Sub business: in 2021, the revenue of cosmetic active ingredients and their raw materials was 730 million yuan / yoy + 12.17%, accounting for 67.03% of the main revenue, and the revenue of synthetic spices was 323 million yuan / yoy + 1.83%, accounting for 29.60% of the revenue. In this round, facing the rising pressure of upstream raw material prices, the company Q4 passed on the cost by raising the price. The selling prices of the two major businesses 2021h2 were 67300 yuan / ton and 52200 yuan / ton, with a month on month increase of + 6.28% / + 9.32% in the first half of the year.
The price of raw materials rose rapidly to the decline of gross profit margin, and continued to increase its research and development strength. The annual gross profit margin of sales is 26.76% / yoy-6.22pct, and the net profit margin of sales is 12.17% / yoy-4.03pct, including 28.47% / yoy-6.91% for cosmetic active ingredients and raw materials, and 27.34% / yoy-7.57% for synthetic spices. Q4 single quarter gross profit margin is 20.22% / yoy-5.87pct, and net profit margin is 6.08% / yoy-12.05pct. The decline in profitability is mainly due to the sharp rise in the prices of raw materials and shipping. In addition, the company has increased R & D investment, the capacity utilization of new production lines is still gradually improving, and it no longer enjoys the epidemic relief policies such as the national reduction and exemption of enterprise social insurance premiums, which also affected the net interest rate to a certain extent. Increasing sales and R & D investment and adhering to innovative development have further laid the foundation for healthy and sustainable development in the future. In 2021, the company’s sales expenses / management expenses / financial expenses / R & D expenses were 12.85 million yuan / 82.16 million yuan / 9.28 million yuan / 45.31 million yuan respectively, YoY + 39.54 / + 11.56% / – 44.07% / + 16.58%. We believe that with the further price increase of products and the further climbing of production capacity, profitability is expected to usher in an inflection point in the second half of the year.
The raised investment project has been successfully put into operation, and the new sunscreen will be on the market soon. In 2021, the company steadily promoted the construction of raised investment projects, successively put octyl triazinone (EHT) and salicylic acid series production lines into trial operation, completed 55.57% of the first phase of 25000t / a high-end daily flavor (AVB) and sunscreen project, completed all the second phase of the project, put into operation 85.18% of 14200t / a sunscreen series products and 28.04% of 2500t (dhhb) daily chemical raw materials, which will be put into operation in the second half of the year, The total income of the raised investment project in 2021 is 619989w yuan. In addition, during the reporting period, the company plans to invest a total of about 3 billion yuan in the construction of high-end personal care products and synthetic spices projects. In this context, the company’s business structure is expected to be further improved.
Investment suggestion: with complete qualifications and rich matrix, focusing on overseas giant customers, it can still take the initiative to raise prices, highlighting its global advantages, and the expansion of customers can be expected. It is optimistic about the core competitiveness of the new sunscreen (dhhb) put into operation in the second half of this year. It is expected that the net profit in 2022 / 23 / 24 will be 200 / 267 / 333 million, EPS will be 177 / 2.37/2.95 yuan and PE will be 24 / 18 / 15x. It is optimistic about the development prospect of the company and maintain the “recommended” rating.
Risk warning: the risk of intensified industry competition, the risk of declining downstream demand and the risk of fluctuations in raw material prices.
