\u3000\u3000 Hubei Dinglong Co.Ltd(300054) (300054)
On the evening of January 18, 2022, Hubei Dinglong Co.Ltd(300054) released the performance forecast for 2021. The company expects to realize a net profit of 208-238 million yuan attributable to the shareholders of the listed company in 2021; The net profit after deducting non recurring profits and losses was 190-220 million yuan, turning losses into profits year-on-year.
Key investment points:
The overall performance turned loss into profit year-on-year, and the performance in the fourth quarter was slightly lower than expected: in 2020, the company's annual performance showed a loss due to the impact of factors such as the provision of large goodwill impairment by subsidiaries related to printing and copying general consumables business. In 2021, due to the intensification of industry competition, the company's printing and copying general consumables business narrowed the gross profit level of the sector, but the operating revenue increased significantly year-on-year, including the revenue and profit of consumables chip business increased year-on-year; The operating revenue of recycled ink cartridge business increased slightly year-on-year; The selenium drum business decreased year-on-year. In Pan semiconductor materials business, CMP polishing pad phase II production line has been put into production in the second half of 2021. The annual production and sales volume of polishing pads is obvious. In July, the sales volume exceeded 10000 pieces in a single month, and the segment revenue and profitability have increased significantly year-on-year, which has played a certain role in boosting the overall performance of the company. The company turned losses into profits year-on-year in 2021. However, quarterly, the company expects to achieve a net profit of 34-64 million yuan attributable to the shareholders of the listed company in the fourth quarter, and the profit performance is slightly lower than expected, mainly due to the significant increase in R & D expenses, exchange losses and equity incentive expenses during the reporting period.
The pan semiconductor materials business is progressing smoothly as a whole and is optimistic about the company's long-term performance growth: the company has actively transformed and developed into the field of Pan semiconductor materials in recent years. During the reporting period, the company's significantly increased R & D expenses are mainly used in CMP polishing fluid and cleaning fluid, photoelectric display panel materials and advanced packaging materials. At present, cleaning fluid and polishing fluid products have been verified at downstream clients, and the construction of large-scale mass production line is also continuing; PI slurry is well verified at the downstream client in 2021, and it is expected to enter the mass production stage in 2022; Advanced semiconductor packaging materials will soon start the research and development process. Based on the polishing pad business performance of the company, which has been well developed so far and has successfully obtained overseas orders, we will continue to be optimistic about the development of Pan semiconductor materials business and its contribution to the performance growth of the company in the future.
Profit forecast and investment suggestions: according to the company's performance in the fourth quarter and the progress of Pan semiconductor materials business, we revised the company's profit forecast. It is estimated that the company's operating revenue from 2021 to 2023 will be RMB 2.288/30.64/3.967 billion respectively, the net profit attributable to the parent company will be RMB 230/3.48/569 million respectively, and the EPS will be 0.24/0.37/0.60 respectively, P / E were 97.60/64.52/39.50 (corresponding to the closing price of 23.88 yuan on January 18, 2022), maintaining the "overweight" rating.
Risk factors: the risk of sharp fluctuations in raw material prices, the risk that the progress of production expansion R & D projects is less than expected, and the risk of intensified competition in consumables business.
