\u3000\u3000 Wuhu Fuchun Dye And Weave Co.Ltd(605189) (605189)
Main points:
Looking forward to the future, the company's existing projects can support capacity expansion in the next 4-5 years. We estimate that the company's revenue / profit is expected to maintain 28% / 23% CAGR to RMB 5.818/518 billion from 2021 to 2025. From the perspective of downstream customers, the traditional customer socks factory is expected to grow steadily. At the same time, the company expands towel, home textile, knitting and other categories. It is estimated that the revenue from 2021 to 2023 will be RMB 2.188/2.809/3.856 billion respectively, the net profit attributable to the parent company will be RMB 225/2.47/339 million respectively, the corresponding EPS will be RMB 1.80/1.98/2.72 respectively, the closing price on January 10, 2022 will be RMB 25.95, the corresponding PE will be 14 / 13 / 10x respectively, and the "buy" rating will be given for the first time. The target market value will be RMB 4.45 billion and the corresponding target price will be RMB 35.65 (corresponding to 18x in 22 years).
Industry analysis: the market scale of colored yarn is close to 20 billion yuan
According to the prospectus, the downstream customers of colored yarn are mainly socks factories and home textile and knitting customers. We estimate that the market scale of colored yarn corresponding to socks factory and home textile is about 7 / 10-14 billion yuan, so it is estimated that the market scale of colored yarn is close to 20 billion yuan.
Although fabric dyeing is dominant at present, the scale of Wuhu Fuchun Dye And Weave Co.Ltd(605189) is far ahead in the field of all cotton yarn printing and dyeing. According to the announcement, the scale of yarn printing and dyeing of the company will be 55000 tons in 2020, far higher than that of its peers, and the capacity of all cotton in Shanghai tiqiao and Shaoxing Guozhou will gradually shrink from 2018 to 2020.
Company advantages: significant cost advantages, leading environmental protection equipment in the world
1) cost advantage: technological transformation reduces unit energy consumption, and the gross profit margin of printing and dyeing processing is better than that of peers by 5-6pct; 2) Environmental protection treatment equipment is the world's leading; 3) Fuchun color card leads the industry standard, and warehouse production can effectively reduce costs and shorten delivery time.
Growth driven: accelerate production capacity, expand categories and digest new production capacity
1) it is estimated that the annual compound growth rate of production capacity will reach 26% from 2020 to 2025; 2) Downstream customers: sock customers grew steadily, with large incremental space for towels, home textiles and knitting; 3) Extending to the upstream industrial chain is expected to improve the profit margin.
Risk tips
The production progress is less than expected; Customer expansion is not as expected; Systemic risk
