\u3000\u30 Fawer Automotive Parts Limited Company(000030) 22 Levima Advanced Materials Corporation(003022) )
Events
Levima Advanced Materials Corporation(003022) announcement: the company achieved an operating revenue of 1.56 billion yuan in the first quarter, a year-on-year decrease of 14%, and the net profit attributable to the parent company was 107 million yuan, a year-on-year decrease of 60%.
Key investment points
Technological transformation and shutdown have a phased impact on the performance of the first quarter
According to the plan, in the first quarter, the company implemented the fund-raising project “technology upgrading and transformation project of tubular tail of EVA device”. EVA device was shut down for 28 days, MTO, PP, EO, EOD and other devices were shut down simultaneously for 7-15 days, and the connection construction and maintenance of carbonate device, ultra-high molecular weight polyethylene device and utility system were carried out. Affected by the reduction of product production and sales and related maintenance costs, the net profit in the first quarter decreased by about 163 million yuan, The price of main raw materials increased significantly year-on-year, affecting the profit of about 64 million yuan in the reporting period. At present, the company’s devices have returned to normal, among which the production capacity of EVA device has increased by 18000 tons on the basis of the previous 121000 tons. After the transformation is completed, the output of EVA and other main products of the company is expected to increase year-on-year in 2022.
The price of EVA remained high and domestic substitution continued to promote. As of the disclosure date of the company’s first quarterly report, the price of EVA products increased by more than 30% compared with the beginning of the year. At present, EVA continues to be in short supply. On the one hand, there is strong demand for downstream photovoltaic, on the other hand, EVA import is blocked due to port congestion. For a long time, China’s EVA has been highly dependent on imports, with an import dependence of more than 50%, especially for EVA products with high VA content, which are difficult to produce. It is expected that EVA photovoltaic materials will still be in short supply for some time, domestic substitution will continue to promote, and it is expected to maintain a high prosperity and good profitability for a long time in the future.
The industrial chain layout was improved, and the construction of new material platform continued to advance
After the completion of the company’s PP second reverse transformation project, an additional 80000 tons of PP capacity was added on the basis of the original 235800 tons. The project has been put into operation in December 2021. The total investment of lithium battery material carbonate project is 580 million yuan. It is planned to build 100000 t / a vinyl carbonate, 50000 T / a dimethyl carbonate, 52600 T / a methyl ethyl carbonate, 7200 T / a diethyl carbonate and 43600 T / a ethylene glycol by-product around the end of 2022. The 20000 t / a UHMWPE and 90000 T / a vinyl acetate combined plant project is expected to have a total investment of 790 million yuan. All work is progressing in an orderly manner and is planned to be completed in the first half of 2023. The project with an annual output of 200000 tons of lactic acid and 130000 tons of polylactic acid is planned to be completed and put into operation in phase I by the end of 2023 and phase II by the end of 2025.
The company continues to extend its industrial chain, layout the industrial chain of degradable plastics and new energy materials, and is optimistic about its platform development for a long time.
Profit forecast
It is predicted that the company’s revenue from 2022 to 2024 will be RMB 8.47 billion, RMB 9.50 billion and RMB 10.31 billion respectively, and EPS will be RMB 0.94, RMB 1.13 and RMB 1.32 respectively. The corresponding PE of the current stock price will be 24, 20 and 17 times respectively, maintaining the “recommended” investment rating.
Risk tips
Photovoltaic demand is less than expected; The production capacity launch progress is less than expected; Risk of large fluctuation of upstream raw material price; Risk of sharp decline in product price; Market systemic risk.
