Jialian Technology (301193)
It is a leading enterprise in the global plastic tableware manufacturing industry. The company is a high-tech enterprise engaged in the R & D, production and sales of plastic products and biodegradable products. It maintains the advantages of the plastic products industry by expanding product categories and R & D and production of biodegradable products. The main products are plastic products (including plastic tableware and plastic household products) and products made of biodegradable materials. In 2021, the revenue accounted for 86.4% and 7.44% respectively, and the export and domestic sales accounted for 70.5% and 29.5% respectively. The main customers are well-known enterprises at home and abroad, such as Amazon, IKEA, Wal Mart, HEMA Xiansheng, RT mart and so on. The company raised 466 million yuan to build a production line of 24000 tons of biodegradable material products and 16000 tons of high-end plastic products. The construction period is expected to be three years. At that time, the total production capacity of the company will be increased from 73000 tons to 113000 tons. Recently announced the acquisition of home depot, a leading company in the environmental protection pulp tableware industry, which is expected to further improve the company's layout in the field of full biodegradation.
The demand side of the traditional plastic products industry is stable, and the biodegradable plastic industry has entered a dividend period. 1) Traditional plastics: the annual output of China's daily-use plastic products is about 80 million tons. In 2020, the income of China's daily-use plastic products production industry was about 180 billion yuan. In 2020, the company's daily-use plastic products operating income was 945 million yuan, and the estimated market share was only about 0.5%. The plastic restriction order issued in 2020 is a phased and gradual replacement, and the supply side optimization and domestic + export demand driven industry still have support in the medium term. The scale of China's fast food and group meal industries is expected to maintain double-digit growth, the demand for plastic tableware is gradually expanding, and the domestic demand for bottom plastic tableware is expected to increase. 2) Biodegradable plastics: the dividend period is driven by technological progress and policies. According to the European bioplastics report, the global production capacity of biodegradable plastics will be about 1.55 million tons in 2021, accounting for only 0.3% of the global plastic output. It is expected that the global production capacity will reach 5.3 million tons in 2026 and 26% in 20192026, of which PLA accounts for about 29% of the output of biodegradable materials. In 2020, the global PLA capacity will be about 450000 tons and that in China will be about 100000 tons. There are many plans for PLA capacity expansion in China in the next five years.
The plastic products business has developed steadily, and the impact of the plastic restriction order is expected to be controllable. In 2021, the company's plastic products business revenue was 1.067 billion yuan, and the CAGR from 2017 to 2021 was 7.8%, maintaining a stable development trend. Plastic restriction policy: 1) in terms of export sales, the company's export sales are mainly to the United States and Europe, and the main revenue of 21h1 accounts for 47% and 13% respectively. At present, there is no national plastic restriction policy involving the company's main products in the United States except plastic bags that have been banned or restricted; The European Union has banned or restricted the use of straw, knife, fork, spoon and other ten kinds of disposable plastic products since January 21. According to the communication of some customers, it will consider purchasing biodegradable products from companies to replace them and hedge the impact of the plastic ban order. 2) In terms of domestic sales, China's plastic restriction order is not "one size fits all". Among the domestic products of 21h1 company, the products affected by the ban include disposable plastic straws and disposable plastic tableware, accounting for 0.03% and 17.06% of the operating revenue respectively. At present, the ban on disposable tableware only includes Hall Food in some areas, and there is no impact on takeout in the medium and short term.
The technology and large-scale production of fully biodegradable products of the company have the first mover advantage, which is highlighted under the plastic restriction order. From 2017 to 2021, the company's revenue scale of fully biodegradable material products increased rapidly from 6 million yuan to 91.89 million yuan, and the proportion of revenue increased from 0.7% in 2017 to 7.44% in 2021. Since 2012, the company has first issued the Bureau in this field. At present, it has more than 20 patents related to biodegradation, including PLA blister production process, PLA injection production process, PLA straw production process, polylactic acid toughness and ductility improvement technology, etc. it is the first drafting unit and main participant of national standards related to degradable products. With the spread of China's plastic ban order, the company has successfully developed well-known brands such as HEMA Xiansheng, 7-fen sweet, honey snow ice city and Yoshinoya, and reached cooperation with well-known customers such as Naixue tea, Xi tea and yum.
Profit forecast and investment rating: the company takes the lead in the technology of biodegradable plastic products. With the accelerated layout of products, markets and production capacity, the business of biodegradable products is expected to enter a period of rapid development with the rapid introduction of Chinese customers in the future. The traditional plastic products business is expected to continue to develop with customers outside China and is still expected to achieve stable growth. We expect the company's total operating revenue to be RMB 1.651/2.016/2.368 billion from 2022 to 2024, with an increase of 34% / 22% / 17% respectively, and the net profit attributable to the parent company from 2022 to 2024 is expected to be RMB 117 / 144 / 172 million, with an increase of 64% / 23% / 19% respectively. At present (May 17, 2022), the share price corresponds to 27x PE in 2022, which is rated as "overweight" for the first time.
Risk factors: failure risk of technology research and development, price fluctuation risk of raw materials and industry policy risk
