\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 208 Sichuan Em Technology Co.Ltd(601208) )
Event: the company released the first quarter report of 2022 and the performance forecast of the first half of the year. Q1 achieved a revenue of 904 million yuan, a year-on-year increase of 21.15%; The net profit attributable to the parent company was 102 million yuan, a year-on-year increase of 19.77%; Q1 achieved a gross profit margin of 23.26%, down 0.79 PCT month on month, and achieved steady growth in the first quarter under the background of a sharp rise in raw materials.
The company is a new material platform manufacturer with outstanding technical competitiveness. Based on the two core technologies of synthesis and film making, the company develops its business territory. In the optical film sector, the company is a leading manufacturer that has rarely opened up the whole industry chain technology of slice synthesis base film coating in China. Its products are applied to MLCC, polarizer, backlight module, touch module and other fields. With complete industrial chain and complete product categories, it has the business potential of benchmarking overseas giants in the medium and long term; In terms of electronic resin, as one of the three main raw materials of high-performance copper clad laminates, the materials produced by the company have the characteristics of high glass transition temperature, low dielectric constant, low dielectric loss and low expansion coefficient, which can meet the needs of high-frequency and high-speed copper clad laminates. At present, the company has established a stable supply relationship with a number of world-renowned CCL manufacturers. With the release of new production capacity, the company will continue to carry out continuous domestic substitution for foreign-funded products such as DIC in Japan and SABIC in Saudi Arabia.
The new material business will enter a centralized release period, with continuous improvement month on month. In the short term, the business of optical film and electronic resin has expanded rapidly. In terms of optical film, the company is building an optical base film with a production capacity of 80000 tons, which will be completed and put into operation from the end of 2022 to the beginning of 2023. The downstream includes PCB, MLCC, polarizer and other application fields; In terms of electronic materials, 60000 tons of special epoxy resin, 5200 tons of high-frequency high-speed resin and 160000 tons of special phenolic resin are under construction, which are expected to be completed and put into operation in May, October and March 2022 respectively. In addition, having rich technical reserves is the company’s core competitiveness. The company’s 500000 flat proton exchange membrane is in the process of industrialization. Overall, the company will usher in the centralized release period of new material business, which is expected to continue to improve month on month and grow steadily year on year.
The impact of rising costs on the profitability of the company is relatively controllable. Affected by geopolitical and other factors in the first quarter, WTI crude oil rose 63.63% year-on-year. Driven by costs, the company’s main raw materials polypropylene resin, polyester chip, PTA and ethylene glycol Q1 increased by 20.73%, 49.01%, 50.26% and 17.81% respectively. In the context of the sharp rise in raw materials, the company achieved a gross profit margin of 23.26%, down only 3.74pct year-on-year, which fully shows that the company’s products have excellent price transmission capacity as a whole. After the new production capacity of main raw materials in subsequent industries is released, the cost pressure is expected to be eased.
Profit forecast and investment suggestions. We expect the company to achieve an operating revenue of 5.314/76.43/9.227 billion yuan and a net profit attributable to the parent company of 5.37/7.52/981 billion yuan from 2022 to 2024, corresponding to 17.6/12.6/9.6 times of PE respectively. The company is a new material platform company, which will usher in the centralized release of new material business. The evaluation is safe at the current position, and the subsequent growth space can be expected to maintain the “buy” rating.
Risk tip: the ramp up of raised investment capacity is less than expected, the ramp up of new optical base film production line is less than expected, and the demand of downstream display industry is less than expected.
