\u3000\u3000 Henan Hengxing Science & Technology Co.Ltd(002132) (002132)
Company events
The company issued the performance forecast for 2021:
1) in 21 years, the company realized a net profit attributable to the parent company of 130-169 million yuan, with a year-on-year increase of 6.3% - 38.2%; It is expected to realize a net profit of 110-149 million yuan, a year-on-year increase of 18.5% - 60.5%.
2) in the fourth quarter of the year, the net profit attributable to the parent company in Q4 was 39-78 million yuan, a year-on-year increase of + 4.4% - 108.6%; The net profit deducted from non parent company was 32-71 million yuan, with a year-on-year increase of 15.8% - 154.8%.
The capacity of 2021h2 diamond line project climbed steadily, and the growth of production and sales led to the overall increase of the company's profits
The company's operation in 2021q4 improved month on month. Although the epidemic situation and natural disasters in the third quarter had an impact on the company's traditional metal products production, the production capacity of diamond line business was released steadily, and the substantial growth of production and sales helped the company's profits. 2021 is the first year of the company's diamond line production capacity breakthrough. In the first half of that year, the company's monthly average production capacity exceeded 500000 km, and in the second half of that year, the monthly average production capacity exceeded more than 1 million km, doubling the growth. We expect the annual output of the company to reach more than 8 million kilometers, with a year-on-year increase of 348%. The growth of product production and sales drives the overall profit level of the company.
The business of traditional metal products will grow steadily next year, and the large volume of diamond line is expected to help the high growth of performance
1) traditional metal products: the company has a production capacity of 100000 tons of galvanized steel wire and steel strand and 200000 tons of prestressed steel strand. The new 200000 ton prestressed steel strand project in Guangxi is expected to be fully completed by the end of 2022 and contribute part of the output.
2) diamond line business: ① steadily expand the production and marketing scale of diamond line and improve the profitability of the company. At present, the company plans to produce 46 million km of diamond line, and plans to produce 30 million km of diamond line in 2022 (16 million km diamond line project reaches production capacity + 30 million km new diamond line project is planned to be put into operation 40-50%). As the production capacity of diamond line gradually climbs. The profitability of the company's business is expected to increase significantly. ② At present, the company uses 8-wire and 11 wire machines for production, and the gross profit margin is higher than the market average. The subsequent company will promote the use of 16 wire machines and is expected to continue to improve the gross profit margin of the business.
The silicone project was officially put into production, and the capacity release increased the company's performance
The company's annual output of 120000 tons of high-performance silicone project has entered the stage of commissioning and trial production. It is expected that the first batch of products will be successfully delivered in February next year. The park where the project is located has prominent geographical advantages, convenient transportation network and relatively complete industrial clusters, which helps the company's Silicone business build a core cost advantage. According to the current market price, the profit per ton of the company's silicone products exceeds 3000 yuan / ton. The company plans to release 70-80% of its production capacity next year. It is expected that the business will achieve a profit of 300 million yuan in 2022, which is expected to significantly increase the company's performance.
Investment advice
At present, the company has formed a dual main business development pattern focusing on metal products and new chemical materials. With the large-scale business of diamond line and silicone, the company's profitability is expected to improve rapidly. We expect the company to achieve an operating revenue of RMB 3.32/72.4/8.93 billion and a net profit attributable to the parent company of RMB 170 / 9.4/1.23 billion from 2021 to 2023. The corresponding PE of the current stock price is 46 / 8 / 6 times respectively, maintaining the "buy" rating.
Risk tips
The price of the company's products fluctuated sharply, the progress of the company's projects under construction was less than expected, and the rhythm of capacity release was delayed.
