\u3000\u3 Bohai Water Industry Co.Ltd(000605) 377 Hangzhou Huawang New Material Technology Co.Ltd(605377) )
Event: Hangzhou Huawang New Material Technology Co.Ltd(605377) released the annual report of 2021 and the first quarterly report of 2022. In 2021, the company realized an operating revenue of 2.94 billion yuan, an increase of 82.40% year-on-year; The net profit attributable to the parent company was 449 million yuan, a year-on-year increase of 72.53%; The net profit attributable to the parent company after deduction was 427 million yuan, a year-on-year increase of 67.56%. 21q4 achieved an operating revenue of 937 million yuan, an increase of 82.19% year-on-year; The net profit attributable to the parent company was 129 million yuan, a year-on-year increase of 47.51%; The net profit attributable to the parent company after deduction was 123 million yuan, with a year-on-year increase of 46.92%.
In addition, in 2022q1, the company achieved an operating revenue of 756 million yuan, a year-on-year increase of 19.39%; The net profit attributable to the parent company was 112 million yuan, a year-on-year increase of 14.62%; The net profit attributable to the parent company after deduction was 103 million yuan, with a year-on-year increase of 6.82%.
Capacity release superimposed on customer structure optimization, and the performance of 21 years &22q1 was stable
Under the repeated epidemic and other external pressures, the company's revenue increased sharply against the trend in 2021, with a year-on-year increase of 82.30% to 2.94 billion yuan, mainly due to the full release of IPO raising and investment capacity and the increase of market share. In terms of products, the company's production and sales of decorative base paper are booming, with a revenue of 2.157 billion yuan in 21 years, a year-on-year increase of 65.22%. In 21 years, the capacity of 70000 tons (phase I) in Ma'anshan was fully released. By the end of 2021, the capacity of the company had reached 220000 tons, with a year-on-year increase of 46.67%; At the same time, the capacity utilization rate and production and sales volume are running at a high level. In 21 years, the capacity utilization rate is 94.13%, and the sales volume is 202500 tons, with a year-on-year increase of 46.18%. Focusing on the medium and high-end market, the company actively expands high-end value customers, optimizes the customer structure, fully benefits from the significant growth of medium and high-end demand, and the average price has increased. In 21 years, the average price of decorative base paper of the company reached 10654 yuan / ton, with a year-on-year increase of 12.98%. In terms of wood pulp trade, the company's wood pulp trade performed well in 21 years, with a revenue of 750 million yuan, a year-on-year increase of 153.56%, mainly due to the rise of 21q4 pulp price.
The 2022q1 epidemic and tight transportation exacerbated external pressure. The company achieved a revenue of 756 million yuan, a year-on-year increase of 19.39%, and the overall performance exceeded expectations. The company's IPO project MAANSHAN 50000 ton capacity (phase II) has been put into operation in 22q1. At the same time, the company has accelerated MAANSHAN 180000 ton capacity, and the company's decorative base paper business is expected to continue to grow.
The cost performance advantage of the European market continues, and the proportion of export revenue is expected to gradually increase
In terms of subregions, China achieved a revenue of 2.559 billion yuan, a year-on-year increase of 79.14%, accounting for 88.02%; Overseas revenue reached 348 million yuan, a year-on-year increase of 101.34%, accounting for 11.98%. Russia's strong overseas demand is superimposed by the strong overseas demand. Compared with Europe, the cost performance advantage of China's advanced decorative base paper production capacity is expected to continue. At the same time, with the continuous expansion of demand in Southeast Asia, the proportion of export sales of the company is expected to gradually increase.
Under the stress test, the profitability toughness showed, and the ability to reduce costs and increase efficiency showed
In terms of profitability, the company's gross profit margin was 22.02% in 2021, a year-on-year decrease of 0.73pct; The gross profit margin of 22q1 was 21.42%, a year-on-year decrease of 3.86pct, which was mainly due to the repeated epidemic, the turbulence of international political situation, the continuous rise of raw material prices, and the rise of transportation and energy costs. Under the comprehensive influence, the net interest rate of the company in 2021 was 15.26%, a year-on-year decrease of 0.87pct; 22q1 net interest rate was 14.88%, a year-on-year decrease of 0.62pct.
On the cost side, the company promotes cost reduction and efficiency increase through fine management. In 2021, the company's expense ratio was 5.02%, a year-on-year decrease of 2.71 PCT; The rates of sales / management / R & D / financial expenses were 0.62% / 1.38% / 3.01% / 0.02% respectively, with a year-on-year increase of -1.97 PCT / 0.06 PCT / - 0.35 PCT / - 0.45 PCT, of which the increase in the rate of administrative expenses was mainly due to the increase in administrative expenses corresponding to the commissioning of Ma'anshan raised investment project. During 2022q1, the expense rate of the company was 4.07%, a year-on-year decrease of 1.79pct;. In terms of cash flow, the operating cash flow of the company in 2021 was 527 million yuan, with a year-on-year increase of 145.25%, and the operation remained stable.
Investment suggestion: the company is the leader in the subdivided field of decorative base paper, with outstanding technology R & D ability, cost control in place and full profitability toughness. The pattern of decorative base paper industry is optimized. With the steady expansion of the company's production capacity, the performance is expected to maintain sustained growth. We estimate that the operating revenue of Hangzhou Huawang New Material Technology Co.Ltd(605377) 20222024 will be RMB 3.565 billion, RMB 4.052 billion and RMB 4.521 billion, with a year-on-year increase of 21.26%, 13.66% and 11.57%; The net profit attributable to the parent company was 508, 613 and 691 million yuan, with a year-on-year increase of 13.22%, 20.67% and 12.71%. The corresponding PE was 9.4, 7.8 and 6.9, and the investment rating of Buy-A was given.
Risk warning: the epidemic situation repeatedly affects the demand, production and shipment risks; The price of raw materials fluctuates greatly; The production capacity is lower than expected; Deterioration of overseas trade environment; Industry competition intensifies risks.
