\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 529 Shandong Pharmaceutical Glass Co.Ltd(600529) )
Event:
Shandong Pharmaceutical Glass Co.Ltd(600529) release the annual report of 2021 and the first quarterly report of 2022. In 2021, the company achieved an operating revenue of 3.88 billion yuan, an increase of 13% at the same time; The net profit attributable to the parent company was 590 million yuan, an increase of 4.7% at the same time; Deduct the net profit not attributable to the parent company of 570 million yuan, an increase of 3.4% at the same time. 21q4, the company’s revenue was 1.07 billion yuan, with a decrease of 4.1%; The net profit attributable to the parent company was 120 million yuan, a decrease of 19.1%. 22q1, the company’s revenue was 1.04 billion yuan, an increase of 12.5% at the same time; The net profit attributable to the parent company was 150 million yuan, a decrease of 1.9%.
Comments:
The production and sales of molded bottles are stable, and the high-end volume is worth looking forward to
In 2021, the company’s moulded bottles, brown bottles, butyl rubber stoppers and controlled bottles achieved operating revenue of 1.53 billion yuan, 800 million yuan, 230 million yuan and 200 million yuan respectively, with an increase of 9%, 6%, 9% and 12% respectively; The corresponding sales volume of molded bottles, brown bottles, butyl rubber plugs and controlled bottles were about 313000 tons, 218000 tons, 5.1 billion and 1.66 billion respectively, with an increase of 7%, 3%, 4% and 6% respectively.
The market development of the company’s high value-added products is smooth. The sales volume of medium borosilicate molded bottles nearly doubled; Nearly 50 million pieces of pre potting were sold, an increase of 145% at the same time; The sales of medium borosilicate tube bottles was 188 million, an increase of 235% at the same time; The sales of medium borosilicate ampoules were 55 million, an increase of 150% at the same time. In the future, the company will expand the production of borosilicate glass bottles and pre potting. As the consistency evaluation policy of injection continues to promote the upgrading and transformation of pharmaceutical packaging materials, it is expected to benefit fully in the future.
The cost is suppressed, and the profitability is weakened in stages
In 2021, the company’s comprehensive gross profit margin was 29.6%, with a decrease of 3.9pct. By product (2021), the average prices of molded bottles, brown bottles, butyl rubber plugs and controlled bottles are 4872 yuan / ton, 3662 yuan / ton, 459 yuan / 10000 pieces and 1180 yuan / 10000 pieces respectively, and the average prices are increased by 75 yuan / ton, 78 yuan / ton, 20 yuan / 10000 pieces and 65 yuan / 10000 pieces respectively; The corresponding gross profit margins were 40.0%, 25.8%, 27.7% and 13.2% respectively, with a year-on-year increase of -4.5pcts, – 7.2pcts, – 2.8pcts and + 2.0pcts.
The increase of product price but the decline of profitability is mainly due to the great impact on the cost side: 1) the cost of bulk raw materials rose in 21 years, especially in Q3. The company raised the price to hedge in 21q4, but it still had a certain impact; 2) Shipping costs have increased significantly, affecting the profitability of overseas business. In 2021, the company’s overseas operating revenue was 960 million yuan, a decrease of 6% at the same time; The comprehensive gross profit margin was 25.8%, with a decrease of 9.7pcts.
22q1 despite the cost pressure, the annual performance can still be expected
At present, the cost pressure still exists. The company raised the price of products in 21q4, which played a strong supporting role in 22q1 operation. The gross profit margin was 29.21%, an increase of 1.66pct at the same time. The company’s net profit margin was 14.70%, down 2.17pct, mainly due to: 1. The increase of freight and travel expenses, and the increase of sales expenses by 144.62%; 2. The impairment loss of accounts receivable increased by 277.37%.
The permeability of borosilicate products in the company is increasing rapidly, and gradually speed up the construction of production capacity to meet the demand. Previously, the projects raised and invested include: 1. The project with an annual output of 4 billion first-class water-resistant medicinal glass bottles; 2. The annual output of 560 million pre filled syringes is planned to expand and transform. With the increase of the proportion of borosilicate products with stronger profitability in the business structure, and with its high market share in the pharmaceutical glass market, the company also has a certain cost transmission ability. Therefore, we believe that the follow-up operation pressure is expected to be gradually relieved. In addition, if the controlling shareholder of the company is changed to Kaisheng group and the matter is successfully implemented, the county-level enterprise will become a three-level subsidiary of China Building Materials Group, the management level will be improved, and relying on the resources and platform advantages of central enterprises in the future, it will be more conducive to market development.
Profit forecast, valuation and rating: Shandong Pharmaceutical Glass Co.Ltd(600529) is the leading pharmaceutical glass in China, with significant advantages in scale and cost. Fixed increase fund-raising is expected to help accelerate the expansion of neutral borosilicate molding bottle and pre filling capacity. Considering that the cost side suppression factor of the company has not been significantly alleviated, we slightly reduced the company’s EPS from 22 to 23 years to 1.18 and 1.41 yuan (12.6% and 16.1% respectively), and increased the EPS for 24 years to 1.81 yuan. In the future, the development of neutral borosilicate glass will further promote the overall profitability and valuation level of the company and maintain the “buy” rating.
Risk tip: the policy implementation is less than expected, the price of raw materials and fuels rises, the project promotion is less than expected, and the recovery of overseas demand is less than expected.
