\u3000\u3 Shengda Resources Co.Ltd(000603) 916 Sobute New Materials Co.Ltd(603916) )
The company released the first quarterly report of 2022 on April 28, with Q1 revenue of 720 million yuan, a decrease of 7.3% at the same time; The net profit attributable to the parent company was 80 million yuan, an increase of 2.8% at the same time; The net cash flow from operating activities was – 40 million yuan.
Key points supporting rating
Q1 revenue decreased and profit increased at the same time: the company released the first quarterly report of 2022 on April 28, Q1 revenue was 720 million yuan, decreased by 7.3% at the same time; The net profit attributable to the parent company was 80 million yuan, an increase of 2.8% at the same time; The net cash flow from operating activities was – 40 million yuan, with a decrease of 175.9%. The rise in raw materials led to a large year-on-year increase in the amount of cash paid for the purchase of goods and the provision of labor services, or was the main reason.
In the first quarter, the gross profit margin and net profit margin remained stable, and the expense rate increased: the comprehensive gross profit margin of Q1 company was 39.2%, decreased by 0.8pct, and increased by 0.5pct month on month; The net interest rate was 13.5%, increased by 1.3pct at the same time and decreased by 1.0pct month on month. The four expense rates of Q1 company totaled 28.7%, with an increase of 1.8pct and a month on month increase of 8.2pct.
The volume of water reducing agent products decreased and the sales volume of functional materials increased greatly: the sales volume of high-performance water reducing agent, high-efficiency water reducing agent and functional material Q1 reached 198000 tons, 12000 tons and 46000 tons respectively, with a year-on-year change of – 12.0%, – 55.9% and 40.9% respectively. We estimate that the unit price per ton of high-performance water reducing agent is 2173.4 yuan, an increase of 3.3% and an increase of 69.6 yuan, while the unit price per ton of high-performance water reducing agent is 1912.2 yuan, an increase of 19.2% and an increase of 307.6 yuan. The unit price of functional materials per ton was 2072.8 yuan, a decrease of 1.0% and a decrease of 20.2 yuan. The price of formaldehyde 2022q1 in the raw material of superplasticizer increased by 14.9% compared with the same period last year, which supported the price increase of the product from the cost side. The steady growth policy has begun to promote the sales of functional materials. With the continuous implementation of infrastructure construction, advanced materials such as wind power grouting slurry and transportation materials in functional materials and traditional materials are expected to continue to promote and grow together.
Capacity construction is expected to further increase the market share. The company’s Guangdong Jiangmen base has a capacity of 100000 tons of high-performance water reducing agent. It is expected to be completed in mid-2022 and put into operation in July. The new base will be completed and put into operation, further consolidating its market position and advantages. In recent years, the production capacity of leading enterprises has continued to expand, which is expected to continue to improve the industry concentration. Under the impact of the changeable external environment, large enterprises with stronger anti risk ability are expected to continue to increase the market share.
Valuation
The company’s performance is in line with expectations. We maintain the original profit forecast. It is estimated that the company’s revenue will be 5.14 billion yuan, 6.4 billion yuan and 7.77 billion yuan from 2022 to 2024 respectively; The net profit attributable to the parent company was 630 million yuan, 790 million yuan and 970 million yuan respectively; EPS was 1.51, 1.89 and 2.31 yuan, maintaining the company’s buy rating.
Main risks of rating
The price of raw materials is lower than expected, and the demand for raw materials is lower than expected.
