\u3000\u3000 Longhua Technology Group(Luoyang)Co.Ltd(300263) (300263)
Event: the company released the annual performance forecast for 2021. The net profit attributable to shareholders of Listed Companies in 2021 was 266.7 million yuan - 311.16 million yuan, an increase of 20% - 40% over the same period of last year. The impact of the company's non recurring profits and losses on the net profit is expected to be about 39-45 million yuan, mainly the non recurring income, government subsidies and financial management income generated by the long-term equity investment accounted by the equity method.
The company's stock and incremental business are in full bloom: in 2021, the company's three business segments go hand in hand and its performance grows at a high speed. 1) In the new electronic materials sector, the localization process of target business was accelerated, the sales of wide molybdenum target and ITO target increased significantly, and the market share increased significantly; The non target business strengthens marketing in the field of semiconductor equipment and photovoltaic, and actively expands to the field of upstream key raw materials and downstream complete sets of equipment. 2) polymer composite panels, PMI foam and warship composites, together with key equipment, accelerate the continuous prosperity of assembly. The promotion of new rail transit composite materials has driven a significant increase in sales performance; PVC foam breaks through the key technologies and completes capacity building, laying the foundation for further market development. 3) In the energy conservation and environmental protection sector, the heat exchange equipment business gives full play to the advantages of lean management of the whole system; The water treatment business has grasped the opportunity of warming up the fine treatment cycle of electric condensate and achieved remarkable results in seizing orders.
New material incubation platform company, the future of military industry and new energy: Based on the traditional main business of energy conservation and environmental protection, the company has transformed its layout and formed two new material sectors of "electronic new materials" + "polymer composites". The core team has led the successful industrialization transformation of the Seventh Five Year Plan Institute of military industry of China. Based on the joint core research and development technology, the three subsidiary companies have made great efforts in the three major fields of military industry, rail transportation and wind power. They are the PMI material military market localization supplier, Cobos technology, the composite leader of military ships, the leader of Haiwei composite materials and the rail breaking vibration field, and the company's 2021 convertible bond investment project - wind turbine blade PVC foam material production capacity. It has been supplied in batches for downstream mainstream blade manufacturers, which is expected to help nearly double the revenue of the sector in 2022. In the new electronic materials sector, the subsidiary Sifeng electronics is the leader of molybdenum target in the panel field. Under the demand of high generation line and OLED, wide molybdenum target will become the core growth point; The subsidiary Jinglian optoelectronics took the lead in breaking the foreign technology monopoly of ITO targets, and the import substitution in the panel field is at the critical point of acceleration; The company also cooperates strategically with Huaxi Group to deeply bind the core resource of upstream heterojunction metal indium.
Profit forecast, valuation and rating: Longhua Technology Group(Luoyang)Co.Ltd(300263) is a new material platform company with great growth. Driven by the release of new material capacity of wind power blades and the wave of photovoltaic heterojunction industrialization, its performance is expected to achieve rapid growth in the future. We maintain the forecast that the net profit attributable to the parent company from 2021 to 2023 will be RMB 286 million, RMB 403 million and RMB 549 million respectively, corresponding to EPS of RMB 0.31, RMB 0.44 and RMB 0.60, maintaining the "buy" rating.
Risk tips: industry competition intensifies the risk; The progress of wind power blade new material raising and investment project is less than expected; The industrialization of photovoltaic heterojunction is less than expected.
