\u3000\u30003 An Hui Wenergy Company Limited(000543) 00054)
Hubei Dinglong Co.Ltd(300054) released the first quarterly report of 2022. In 2022q1, the company achieved revenue of 570 million yuan, yoy + 9.57%, qoq-19.15%, net profit attributable to parent company of 71.369 million yuan, yoy + 90.12%, QoQ + 13.42%, non net profit attributable to parent company of 66.709 million yuan, yoy + 27.23%, QoQ + 17.09%. In the first quarter, the comprehensive gross profit margin increased to 39.0%, reaching a new high since the second half of 2019. The net profit margin attributable to the parent company was 12.5% and increased by 3.6% month on month. As the fourth quarter is the peak season of consumables and the first quarter is the off-season of the whole year, the revenue of consumables decreased month on month. Thanks to the continuous growth of CMP polishing pad revenue, the new products of softshow PI slurry have gradually realized mass production and sales, the company’s revenue has increased and the profitability has been significantly improved. The company continued to invest heavily in R & D, with a R & D investment of 63.172 million yuan in the first quarter, yoy + 25.87%, providing an important guarantee for new product R & D and new business development.
It is planned to buy back shares with its own funds to demonstrate the company’s confidence in development. The company plans to use its own funds to repurchase A-Shares issued by the company through centralized bidding trading of Shenzhen stock exchange for the implementation of employee stock ownership plan or equity incentive. The amount of repurchase is not less than 200 million yuan and not more than 400 million yuan; The repurchase price shall not exceed RMB 29 / share. Considering the operation, financial situation and long-term development, the company plans to buy back shares with its own funds and use them for employees’ continuous plan or equity incentive, so as to demonstrate the company’s confidence in the future development prospect and its determination to maintain the value of the company.
The layout of CMP materials has been continuously improved and breakthroughs have been made in multiple product dimensions. The company has achieved full process and full node coverage in the field of CMP polishing pad, and has become a primary supplier for some customers in 2021. China has a significant leading advantage. In the future, with the continuous release of customer capacity and the increase of the company’s share, the polishing pad business is expected to usher in continuous and large-scale growth. In terms of CMP polishing fluid, the company’s oxide layer polishing fluid products obtained a small amount of orders in 2022, the al process polishing fluid entered the ton purchase stage of customers, and the client made a breakthrough. In addition, the company has independently prepared grinding particles as the core raw material of polishing liquid, which has broken the overseas monopoly and improved the profitability at the same time. In terms of cleaning fluid, the company has obtained a small order for CMP cleaning fluid in Cu process.
Rouxian and other materials are ready to open a new growth pole. In terms of YPI, the company completed customer verification in 2021 and achieved nearly 10 million revenue. In 2022, with the increase of the production rate of downstream AMOLED plants, the company’s YPI may further increase its volume. The company expects that in 2025, the market scale of PSPI in China is expected to reach 3.5 billion yuan and tfe-ink is close to 1 billion yuan. Under the background that the industry is monopolized overseas, the pilot test of Dinglong PSPI and tfe-ink products is completed and the customer verification is good. We believe that during the period when the company’s first growth line cmpad gradually develops synchronously outside China, other electronic material products are expected to gradually promote the development of the company’s ceiling and future space, and open the second / third growth curve. It is expected that the company will achieve revenue of RMB 2.978/35.76/4.324 billion in 2022, 2023 and 2024 respectively, and net profit attributable to the parent company of RMB 403 / 653 / 927 million, corresponding to the current valuation of 36.0/22.2/15.6x, maintaining the “buy” rating.
Risk warning: the progress of new product R & D and customer introduction is less than expected, and the downstream demand is less than expected
