\u3000\u3 Shengda Resources Co.Ltd(000603) 916 Sobute New Materials Co.Ltd(603916) )
The company released the first quarterly report of 2022:
In 2022q1, the revenue was 716 million yuan, a year-on-year increase of – 7.28%, the net profit attributable to the parent company was 80 million yuan, a year-on-year increase of + 2.79%, and the non net profit deducted was 75 million yuan, a year-on-year increase of – 0.89%. The gross profit margin and net profit margin of sales were 39.23% and 13.49% respectively, with a year-on-year increase of -0.8pct and + 1.25pct. In terms of revenue structure, high-performance water reducer accounted for 60.1%, year-on-year -1.2pct, functional materials accounted for 13.3%, year-on-year + 4.4pct, and high-efficiency water reducer accounted for 3.3%, year-on-year -2.5pct.
The delivery in March was disturbed by the epidemic, and the benefit unit price of high-performance water reducing agent increased year-on-year:
The revenue of 22q1 high-performance water reducer was 430 million, a year-on-year increase of – 9.05%. In terms of production and sales volume, the high-performance sales volume of 22q1 was 198000 tons, with a year-on-year increase of – 26900 tons, and the output was 205000 tons, with a year-on-year increase of – 28900 tons. It is expected that it will be mainly affected by the epidemic and logistics control. The revenue in East China and South China will account for 43.23% and 7.41% respectively in 2021. In terms of unit price, the average price of 22q1 high-performance ton was 2173 yuan, with a year-on-year increase of + 70 yuan and a month on month increase of – 9 yuan, mainly benefiting from the price increase of 21q4.
The revenue of 22q1 superplasticizer was – 47.46% year-on-year, and the sales volume was 12300 tons, with a year-on-year increase of – 15600 tons.
In terms of cost, the average purchase price of 22q1 ethylene oxide was – 0.12% year-on-year. The company has the ability to prepare polyether storage and effectively hedge material price fluctuations.
Continuous high growth of functional materials:
The revenue of functional materials was 95 million, with a year-on-year increase of + 39.56%, and the proportion of revenue increased significantly. In terms of production and sales, the sales volume of 22q1 functional materials was 45800 tons, a year-on-year increase of + 13300 tons, and the output was 51500 tons, a year-on-year increase of + 14600 tons. In terms of unit price, the average price per ton was 2073 yuan, a year-on-year increase of – 20 yuan (a decrease of less than 1%), and a month on month increase of + 339 yuan.
Other concerns:
① the total expense rate of the company during the period was 28.66%, with a year-on-year increase of + 1.83pct. The expense rates of sales, management, R & D and finance were 11.85%, 9.07%, 5.93% and 1.8% respectively, with a year-on-year increase of + 0.73pct, + 0.34pct, – 0.2pct and + 0.96pct. ② The net cash flow from operating activities is -40.66 million yuan, which is expected to be related to the increase of raw material preparation. The inventory at the end of the reporting period is 614 million (463 million at the beginning of the period and 475 million at the end of 21q1), and the prepayment increases by 13.82% compared with the beginning of the period. ③ The credit impairment of 22q1 was + 28.73 million yuan, mainly the reversal of provision, and that of 21q1 was + 13.33 million yuan in the same period. ④ The income tax rate of 22q1 is 10.7%, and that of 21q1-21q4 is 16.77%, 13.5%, 11.98% and 10.06% respectively. The year-on-year decrease of the tax rate is expected to be related to the increase of subsidiaries applying the income tax rate of 20%.
Investment suggestions: continue to pay attention to ① the volume of high-performance water reducing agent after epidemic, ② open the second curve of functional materials, and ③ steady growth from expectation to verification, which is expected to benefit from comprehensive infrastructure construction. We estimate that the net profit attributable to the parent company from 2022 to 2024 will be 711 million, 907 million and 1119 million. The dynamic PE corresponding to the share price on April 29 will be 13X, 11x and 9x respectively, maintaining the “recommended” rating.
Risk warning: infrastructure and municipal projects are not advancing as expected; The application process of new materials is not as expected; Risk of sharp fluctuations in raw material prices.
