\u3000\u3 Shengda Resources Co.Ltd(000603) 916 Sobute New Materials Co.Ltd(603916) )
Event overview
The company announced the first quarterly report of 2022. In 2022q1, the company achieved a revenue of 716 million yuan, a year-on-year increase of – 7.28%, and the net profit attributable to the parent company was 80.25 million yuan, a year-on-year increase of + 2.79%;
The sales volume of functional materials increased strongly, and the price gross profit margin stabilized and rebounded month on month. The company’s performance slightly exceeded our and market expectations, and achieved growth against the trend, further reflecting its competitiveness. In 2022q1, the demand for real estate construction still showed a downward trend. Although the growth rate of infrastructure investment was good, the control of Northern Winter Olympic Games in February and the upgrading of epidemic control in East China in the second half of March still had a great impact on the company’s delivery. According to the operating data disclosed by the company, the delivery volume of admixtures of 2022q1 company decreased from – 10.2% to 260000 tons year-on-year, of which the sales volume of high-performance water reducer, the main product, decreased by 12% to about 198000 tons year-on-year. However, benefiting from the company’s continuous research and development of new products and the expansion of key engineering channels, the sales volume of the company’s functional materials in 2022q1 increased by 41% to 45800 tons year-on-year, reflecting the company’s product iterative R & D competitiveness. It is estimated that the average price of Q1 admixture of the company is about 2143 yuan / ton, which has increased steadily compared with Q4. Due to the decline of ethylene oxide cost relative to the high point of 2021q4, the gross profit margin of the company continues to increase by 0.5 percentage points compared with 2021q4. We estimate that 2022q1 admixture business contributes about 60 million yuan of profit.
The testing business and scale effect are also affected to some extent, and the effective tax rate is reduced and the profit is thickened. According to the calculation of the announced operation data, the contribution revenue of testing and other businesses of the company in 2022q1 was 165170 million yuan, a year-on-year decline. We judge that the main reason is also the upgrading of epidemic control in East China in the second half of March. Since 2021, the company’s information-based production and national layout have effectively reduced the production and transportation costs. However, due to the blocked delivery in March, the scale effect of 2022q1 has been weakened and the cost rate has increased slightly compared with the same period. As some bases of the company are in a state of loss, the effective income tax rate of the company decreases, the gross profit margin increases month on month and the effective tax rate decreases are the reasons for the contrarian growth of the company.
2022h2 will grow steadily or continue to make efforts, and the company’s growth and anti risk ability will continue to be reflected. We expect that after the epidemic, the state will introduce further measures to stabilize growth, and the approval and commencement of infrastructure projects will also accelerate. At the same time, the real estate side is expected to recover under the correction of policies, and the superposition Jiangmen base is expected to be put into operation. At that time, the company’s sales growth is expected to rise and the transportation cost rate is expected to further decline. In 2021, the company completed the acquisition of Jiangsu Daocheng layout stainless steel pipe field, and announced to invest in the construction of flexible waterproof project, further enriching the company’s product structure. It is judged that the company will still accelerate to become a comprehensive platform material enterprise in 2022, and the company’s growth and anti risk ability will continue to appear after it goes on the market.
Investment advice
The profit forecast remains unchanged. It is estimated that from 2022 to 2024, the company’s revenue will be RMB 5.44/66.9/8.26 billion, eps1.5% The closing price is RMB 8.28/11, which corresponds to the closing price of RMB 8.28/11.58/14. Maintain the target price of 31.60 yuan and the “buy” rating.
Risk tips
The demand is lower than expected, the cost is higher than expected, and there are systemic risks.
