\u3000\u3 Jiangsu Eastern Shenghong Co.Ltd(000301) 069 Shandong Kaisheng New Materials Co.Ltd(301069) )
Key investment points
The company’s profitability improved in 2022q1: in 2022, the company’s revenue in Q1 was 258 million yuan, a year-on-year increase of 31.35%; The net profit attributable to the parent company was 69 million yuan, a year-on-year increase of 33.58%, the gross profit margin was 40.15%, a year-on-year increase of 1.08 PCT and a month on month increase of 0.69 PCT; The net profit margin on sales was 26.69%, up 0.44pct year-on-year and 8.09pct month on month. Overall, 2022q1 company’s revenue is in line with expectations, and its gross profit margin, net profit margin and other profitability exceed expectations.
The improvement of the company’s profitability is expected to be mainly caused by the improvement of product Prosperity: 1. The company’s product sulfoxide chloride, as a broad-spectrum chlorinating agent, can be used to produce pesticide products. In addition, chlorpromazine is the raw material for the production of chlorpromazine. The recent rise in food prices and the increased willingness to plant have promoted the demand for pesticides, which has driven the company’s raw materials and products that can produce pesticides. 2. The first quarter report showed that the increase in sales expenses was due to the year-on-year increase in export business. Among all products of the company, aramid polymerized monomer M / p-benzoyl chloride is the corresponding export variety. Overseas customers have higher requirements for aramid polymerized monomers, so their gross profit margin will be higher than that in China, and the increase of exports will increase the gross profit margin of aramid polymerized monomers. In addition, the gross profit margin of aramid polymerized monomer has remained above 45% in recent three years, which is the most profitable variety among all products of the company. The improvement of its landscape can increase the overall profitability of the company. 3. Affected by the price rise of raw materials and the prosperity of products, the selling prices of products of companies such as thionyl chloride and M / p-benzoyl chloride are expected to increase year-on-year.
It is expected that the company’s subsequent performance will increase with the release of production capacity: with the release of new production capacity of 10000 t / A / p-benzoyl chloride and 1000 t / a PEKK in the middle of this year, the company’s revenue and profit are expected to increase in the following quarters.
Investment suggestion: in view of the company’s higher than expected profitability in 2022q1, our company’s net profit attributable to the parent company from 2022 to 2024 reached 307, 483 and 649 million yuan (the original predicted values were 292, 477 and 647 million yuan), with a year-on-year increase of 58.5%, 57.7% and 34.4%. The current stock price corresponds to 50, 32 and 24 times of PE value from 2022 to 2024 respectively, maintaining the investment rating of “buy-b”.
Risk tip: the expansion and sales of polyether ketone and other products are less than expected, the price of raw materials rises sharply, and the penetration rate of lithium difluorosulfimide is less than expected
