\u3000\u30003 Dongguan Winnerway Industry Zone Ltd(000573) 00057)
Event: Shantou Wanshun New Material Group Co.Ltd(300057) released the annual report of 2021 and the first quarterly report of 2022. In 2021, the company realized an operating revenue of 5.437 billion yuan, a year-on-year increase of 7.28%; The net profit attributable to the parent company was -44 million yuan, a year-on-year decrease of 156.99%; The net profit attributable to the parent company after deducting non-profit was -54 million yuan, a year-on-year decrease of 198.36%. Among them, 2021q4 company achieved an operating revenue of 1.364 billion yuan, a year-on-year decrease of 5.68%; Net profit attributable to parent company -66 million yuan; The net profit attributable to the parent company after deduction of non-profit is – 70 million yuan. In addition, in 2022q1, the company’s operating revenue was 1.337 billion yuan, a year-on-year decrease of 5.07%; The net profit attributable to the parent company was 54 million yuan, a year-on-year increase of 663.01%; The net profit attributable to the parent company after deduction was 50 million yuan, with a year-on-year increase of 676.28%.
Actively layout the battery aluminum foil business, and the profit recovery of 22q1 exceeded expectations
In terms of business, in 2021, the company’s aluminum processing, paper packaging and functional film businesses achieved revenue of RMB 2.849 billion, 507 million and 33 million respectively, with year-on-year changes of + 11.12%, – 0.02% and – 33.52% respectively. Among them, the aluminum processing business contributed to the main revenue and made good progress in market development. In 2021, the company’s sales volume of battery foil reached 2886 tons, with a year-on-year increase of 825%, mainly supplying high-quality customers such as excellent foil talents, Zhuoyue new materials, Ningde BofA and so on; The sales volume of Huabei Aluminum Co., Ltd. and Changxin Aluminum Co., Ltd. reached 1.55 million tons, mainly including 1.55 million tons of aluminum foil and battery materials. The company continues to focus on the field of battery aluminum foil. At present, the production capacity of battery aluminum foil is 40000 tons, and the phase II project of 32000 tons is under construction; In January 2022, the company announced that it planned to raise 1.7 billion yuan for the construction of 100000 tons of power and energy storage battery aluminum foil. 2022q1 performance rebounded significantly, mainly due to the company’s Anhui Zhongji phase I high-precision battery aluminum foil project with an annual output of 40000 tons, which was put into operation in December 2021, and the gradual release of production capacity led to a significant increase in the profitability of aluminum processing business.
The provision for impairment has been implemented in 21 years, and the traditional business is in continuous improvement
The short-term performance loss in 2021 was mainly due to the fierce competition in the downstream market. The company accrued 285331 million yuan of goodwill impairment loss for its subsidiary Shantou Dongtong photoelectric materials Co., Ltd., 154457/447091 million yuan of fixed assets, inventory depreciation loss and contract performance cost impairment loss respectively, with a total asset impairment of 747871 million yuan. Since 2021, the company has continuously improved its traditional business. On the one hand, the company has adjusted the settlement pricing period with most customers since 2021q4 to shorten the pricing and delivery time to reduce the risk of aluminum price fluctuation; On the other hand, strengthen the management of inventory and loan return, and use hedging and other means to hedge risks.
Investment suggestion: as the leader of medium and high-end aluminum foil manufacturing, the company has actively arranged the battery aluminum foil business and successfully entered the Contemporary Amperex Technology Co.Limited(300750) supply chain system, which can be expected in the future. We expect the operating revenue of 3 Haima Automobile Co.Ltd(000572) 0222024 to be RMB 6.842 billion, 7.233 billion and 8.122 billion, with a year-on-year increase of 25.83%, 5.72% and 12.29%; The net profit attributable to the parent company was 253 million yuan, 360 million yuan and 452 million yuan, with a year-on-year increase of 675.33%, 42.45% and 25.62%. The corresponding PE was 18.8x, 13.2x and 10.5x, and the investment rating of Buy-A was given.
Risk warning: the demand for power and energy storage battery is lower than the expected risk; The risk of intensified industry competition; Price fluctuation risk of raw materials; Project progress is less than expected risk.
