\u3000\u3000 Sichuan Em Technology Co.Ltd(601208) (601208)
Events
On January 17, the company released the performance forecast for 2021. Compared with 2020, the company expects the net profit attributable to the parent company in 2021 to increase by about 175 million yuan to 205 million yuan (that is, the net profit attributable to the parent company in 2021 will range from 350 million yuan to 380 million yuan), a year-on-year increase of about 99.72% to 116.81%. From the single quarter of the fourth quarter, the net profit attributable to the parent company ranged from 76 million yuan to 106 million yuan.
Business analysis
The company’s business operation continued to improve. During the reporting period, the company’s insulation business benefited from the market-oriented construction of downstream new energy, UHV transmission, power generation equipment, rail transit and other industries, and its operation has improved; In terms of optical film material business, the company acquired and integrated Shengtong optical film production line. In addition, the commissioning of Jiangsu Dongcai line 3 further improved the production efficiency of the company’s optical film; In terms of electronic materials, the company continued the technical transformation of electronic resin and increased the production capacity of electronic resin. Under the background of the obvious acceleration of the localization process of optical film materials and electronic materials, the company’s new material business continues to increase in volume.
The production capacity of optical base film and electronic resin has been expanded, and the variety structure has been continuously optimized. In terms of optical base film, with the commissioning of Jiangsu Dongcai line 3, the company has five optical polyester base film production lines with a total capacity of about 100000 tons. The company plans to build a 200000 ton film material project in the future. Through its subsidiary Jiangsu Dongcai and its wholly-owned subsidiary Sichuan film material, the company will build MLCC release film base film, high-end anti-corrosion dry film base film, release film base film for polarizer and other high-performance films; In addition, the company plans to build the industrialization project of functional membrane materials with an annual output of 100 million square meters, which will gradually extend to the downstream. In terms of electronic resin, the company’s 5200 tons of high-frequency high-speed resin and 60000 tons of epoxy resin projects will gradually reach production in 2022. In addition, the company’s Dongrun project plans to produce 160000 tons of high-performance phenolic resin and formaldehyde per year, which are mainly used in the fields of electronic packaging, high-end composites and adhesives. With the large volume of the above projects, the company’s electronic resin business will continue to grow.
Profit forecast and investment suggestions
We revised the company’s net profit attributable to the parent company from 2021 to 2023 to be 360 (- 10%), 574 (- 1.7%) and 784 (+ 0.1%) million yuan respectively (the values before 2021 to 2023 were 484 million yuan, 584 million yuan and 783 million yuan respectively); EPS is 0.40, 0.64 and 0.87 yuan respectively, and the corresponding PE is 40.7x, 25.5x and 18.7x respectively. Maintain the “buy” rating.
Risk tips
The construction of electronic resin production capacity is less than expected; The rhythm of electronic resin volume is less than expected; The demand for optical film is less than expected; The product competition pattern has deteriorated.
