\u3000\u30003 Dongguan Winnerway Industry Zone Ltd(000573) 00057)
Event: the company released the first quarterly report of 2022.
The company achieved a revenue of 1.337 billion yuan in 22q1, with a year-on-year increase of – 5.07% and a month on month increase of – 1.98%; The net profit attributable to the parent company was 54.062 million yuan, with a year-on-year increase of + 663.01%. The loss was reversed month on month, and the profit in the first quarter reached the highest level in history.
The profit of double zero grade aluminum foil is thickened, and the aluminum foil of battery continues to increase.
In December 2021, the company’s 72000 ton high-precision battery aluminum foil phase I project was put into operation, and the volume was accelerated from 22q1. The company sold 23700 tons of 22q1 aluminum foil, with a year-on-year increase of 24%, of which the sales of Jiangsu Zhongji and Anhui Zhongji were 1850 / 5200 tons respectively. 22q1’s performance exceeded expectations: 1) in the aluminum foil export business, the price difference outside China has brought profit thickening. According to the company’s announcement, 50% ~ 70% of the company’s aluminum foil business revenue comes from export. Affected by the rise of energy costs and the decline of production capacity in Europe, the company’s export profit has increased significantly; 2) The high-end battery aluminum foil is put into production and continues to be in high volume. The downstream customers of battery aluminum foil have high requirements for process, scale and comprehensive production factors. The certification of the company’s downstream customers is smooth. With the production of high-end capacity, the battery aluminum foil business is expected to grow quarter by quarter.
Double barriers of production and client build a moat, and capacity planning helps long-term development.
1) production end: the company’s battery aluminum foil production line has the characteristics of high quality and high yield. Thanks to the introduction of foreign imported rolling mills + multi link accurate quality control, according to the fixed increase announcement, the yield of battery aluminum foil of 22q1 company exceeds 78%; 2) Client: the company’s battery aluminum foil has entered the Contemporary Amperex Technology Co.Limited(300750) supply chain and supplied to many high-quality customers such as excellent foil talents, excellent new materials, Ningde BofA, Sunwoda Electronic Co.Ltd(300207) , Do-Fluoride New Materials Co.Ltd(002407) and so on. At present, the company has an aluminum foil production capacity of 123000 tons, a production capacity of 32000 tons under construction, and a planned production capacity of 100000 tons in the future. After all, the production capacity of 255000 tons ranks first in the industry, and continues to expand its advantages in high potential tracks. We estimate that the net profit attributable to the parent company from 2022 to 2024 will be RMB 259 / 359 / 435 million respectively, with a year-on-year increase of + 690.5% / 38.5% / 21.1%, and the corresponding PE will be 17.23x/12.44x/10.27x respectively, maintaining the “buy” rating.
Risk warning.
The price of raw materials has risen sharply, the production capacity is less than expected, the market competition is intensified, the exchange rate fluctuates and the epidemic risk is repeated.
