\u3000\u3000 Puyang Huicheng Electronic Material Co.Ltd(300481) (300481)
Event: on January 20, the company released the annual performance forecast for 2021. In 2021, the company expects to realize a net profit attributable to the parent company of RMB 243-260 million, a year-on-year increase of + 35% ~ + 45%. Among them, 2021q4 company is expected to realize a net profit attributable to the parent company of 66.03 to 84 million yuan, with a month on month ratio of – 0.4% ~ + 26.7% and a year-on-year ratio of + 67.5% ~ + 113.0%.
The demand for main products continued to boom, adding new production capacity to boost the overall performance. In 2021, the demand for maleic anhydride derivative series products of the company continued to improve. On the one hand, the large-scale development of power grid construction has driven the demand for products in the field of insulation electricians. On the other hand, the strong demand of wind power industry has rapidly improved the application of the company’s products in wind power blades. In 2021, the company produced 45000 T / a maleic anhydride derivatives at full capacity, laying a solid foundation for performance growth. At the same time, the company’s “hydrogenated bisphenol a project with an annual output of 3000 tons of new resin material” was successfully completed at the end of June 2021. The operation of the project widened the company’s business territory in the field of new materials, further improved the profit space and effectively thickened the company’s performance.
Fixed growth promotes the accelerated expansion of production capacity, and new projects are launched to enhance the company’s R & D advantages. In 2021, the company raised an additional 800 million yuan to invest in the construction of “maleic anhydride derivatives, functional material intermediates and R & D center project”. The project is expected to be completed in 2023 and reach production in 2025. At that time, the company will increase the production capacity of functional material intermediates by 3200 T / A and maleic anhydride derivatives by 50000 T / A, so as to help the company timely respond to the rapidly growing market demand of downstream applications and open up room for performance improvement. In addition, the company announced on January 14, 2022 that it plans to invest 330 million yuan to build the “functional material R & D and pilot test integration project”, which is expected to be completed in early 2024. The implementation of new projects will effectively improve the company’s product R & D capability, continue to consolidate the technical moat, and create a sustainable competitive advantage for the company’s future market development in the field of new materials.
Maleic anhydride derivatives can effectively improve the performance of epoxy resin, and the company’s products have broad prospects under the tide of wind power. In the field of wind power, at present, the mainstream blade manufacturers use epoxy resin as the matrix material for blade pouring molding, and the epoxy resin can only be used after curing. Methyltetrahydrophthalic anhydride produced by the company is the curing agent supporting epoxy resin. The epoxy resin cured by maleic anhydride derivative has the advantages of good mechanical properties, excellent anti-corrosion performance and small curing shrinkage, which can effectively meet the high-performance requirements of wind power materials. With the substantial expansion of offshore wind power industry, the curing agent business of the company will directly benefit from the construction planning of offshore wind power industry, with broad development prospects, which is expected to help the company grasp the market opportunities in the field of new energy.
Profit forecast, valuation and rating: the company’s performance in 2021 is slightly higher than expected. In the future, with the improvement of the company’s existing capacity utilization and the gradual production of new capacity, the company’s performance will continue to develop well. We raised the company’s profit forecast from 2021 to 2023. It is estimated that the net profit attributable to the parent company from 2021 to 2023 will be 251 (up 5.5%) / 3.05 (up 1.7%) / 385 (up 6.4%) million yuan respectively, corresponding to EPS of 0.85/1.03/1.30 yuan / share respectively. We still maintain the company’s “buy” rating.
Risk tip: downstream demand is less than expected, capacity construction risk and product price fluctuation risk.
