\u3000\u30003 Dongguan Winnerway Industry Zone Ltd(000573) 00057)
Event: Shantou Wanshun New Material Group Co.Ltd(300057) disclosed that in the first quarter report of 2022, the company achieved an operating revenue of 1.337 billion yuan in 2022q1, a year-on-year decrease of 5.07% and a month on month decrease of 1.97%; The net profit attributable to the shareholders of the listed company was 54 million yuan, an increase of 663.01% year-on-year and 181.65% month on month; The net profit of deducting non return to parent was 50 million yuan, with a year-on-year increase of 676.28%, turning losses into profits month on month.
The gross profit of aluminum processing business increased, driving the high performance of 2022q1 company. In 2022q1, the company realized a gross profit of 179 million yuan, an increase of 65.46% year-on-year and 120.11% month on month; The gross profit margin increased from 7.68% to 13.39%, up 5.71 PCTs year-on-year. We believe that the aluminum processing business contributes mainly to the gross profit increment. 1) Volume: the sales volume of aluminum foil business of 2022q1 company was 23700 tons, with a year-on-year increase of 24%. Among them, Anhui Zhongji (mainly producing battery aluminum foil) sold 5200 tons, and Jiangsu Zhongji (mainly producing double zero foil) sold 18500 tons. 2) Price: since 2021, affected by the tight supply and demand in the aluminum foil market, the processing fee of aluminum foil in the industry has increased by more than 10%. With the gradual release of 40000 tons of production capacity of Anhui Zhongji, the company's performance is expected to continue to deliver.
The expense rate of the company increased slightly during the period. During 2022q1, the company's expenses increased by 24.93% year-on-year to 107 million yuan, and the expense rate increased by 1.92pcts year-on-year from 6.09% to 8.02%. Specifically, the sales expense decreased by 29.6% year-on-year to 18 million yuan, and the sales expense rate decreased by 0.46 PCTs year-on-year from 1.79% to 1.32%; The management expense increased by 1.89% year-on-year to RMB 30 million, and the management expense rate increased by 0.15 PCTs year-on-year from 2.07% → 2.22%. Affected by the increase of interest expense and the decrease of exchange income, the financial expense increased by 41.378% year-on-year to 21 million yuan, and the financial expense rate increased by 1.25 PCTs year-on-year from 0.28% to 1.54%. Among them, the increase of interest expense is mainly due to the reduction of interest capitalization amount due to the completion of some assets of construction projects in Guangdong Wanshun and Anhui Zhongji, which are included in the increase of interest expense accordingly. The R & D expenses increased by 42.64% year-on-year to 39 million yuan, and the R & D expense rate increased by 0.98 PCTs year-on-year from 1.96% → 2.94%. Overall, the company's net profit margin increased from 0.42 to 4.0%, up 3.58pcts year-on-year.
The aluminum foil leader will start again and actively layout the battery aluminum foil business. At present, the company is producing 40000 tons of battery aluminum foil, and the phase II 32000 tons project has been started. Downstream customers of battery positive foil include Contemporary Amperex Technology Co.Limited(300750) , Ningde BofA, Do-Fluoride New Materials Co.Ltd(002407) , Sunwoda Electronic Co.Ltd(300207) , youfoil talents, Huzhou Tianfeng, etc. Downstream customers of battery soft foil include Lidun new energy, Zhuoyue new materials, Zijiang new materials, Zhejiang Tony Electronic Co.Ltd(603595) , Jiangxi mingguan and other companies. In January 2022, the company announced that it plans to raise no more than 1.7 billion yuan to invest in the field of 100000 tons of power and energy storage battery aluminum foil and continue to develop the field of battery aluminum foil. In addition, the company accelerated the layout of upstream raw materials, invested 1.192.2 billion yuan to establish Sichuan Wanshun Zhongji aluminum industry, and planned 130000 ton aluminum sector and strip project (including 80000 tons of battery aluminum foil blank) to further reduce costs.
Profit forecast and investment suggestions: it is assumed that the output of battery aluminum foil in 2022, 2023 and 2024 will be 3.5/5.370000 tons respectively, and other traditional businesses such as paper packaging will remain unchanged. We expect the net profit of the company in 2022, 2023 and 2024 to be RMB 278 million, RMB 375 million and RMB 450 million respectively. As of April 27, 2022, the market value was 4.5 billion yuan, corresponding to 16 / 12 / 10x PE from 2022 to 2024, maintaining the "buy" rating of the company.
Risk warning events: price fluctuation of main products, raw material cost fluctuation, industrial policy change, project progress is less than expected, the risk of decline in processing fees due to increased market competition, and the risk of lag in the use of public information in research reports.
