\u3000\u3000 Puyang Huicheng Electronic Material Co.Ltd(300481) (300481)
In 2021, the net profit deducted from non parent company will increase by 31% – 43% in advance, maintaining the “buy” rating
On January 20, the company released the performance forecast for 2021. It is estimated that the net profit attributable to the parent company is RMB 243 million-260 million, with a year-on-year increase of 35% – 45%; It is estimated that the net profit deducted from non parent company is RMB 224-243 million, with a year-on-year increase of 31.4% – 43.1%; It is estimated that in 2021q4, the net profit not attributable to the parent company will be deducted from 58.0325 million yuan to 77.9956 million yuan, with a year-on-year increase of 54.7% – 107.9% and a month-on-month increase of 0.3% – 34.9%. We are optimistic about the high prosperity of maleic anhydride derivatives. Combined with the performance forecast for 2021, we raised the company’s profit forecast. It is estimated that the net profit attributable to the parent company from 2021 to 2023 will be 246, 315 and 390 (original value 230, 292 and 352) million yuan respectively, corresponding to EPS of 0.83, 1.06 and 1.32 (original value 0.78, 0.99 and 1.20) yuan / share respectively. The current stock price corresponds to PE of 2021-2023, 28.4, 22.2 and 18.0 times respectively. With the positioning of “leading technology, cost advantage and continuous optimization and extension of product line”, the company has strong certainty of long-term sustainable growth and maintains the “buy” rating.
Downstream power grid construction and high prosperity of wind power industry have driven demand growth
Maleic anhydride derivatives are widely used in electrical equipment insulation materials, coatings, composite materials, electronic component packaging materials and other fields. About 40% of the company’s sales structure is used in electrical equipment insulation materials, mainly used in the production of various components of important transmission and distribution equipment such as transformers, insulators and transformers. According to the report of China Energy News on January 11, during the 14th Five Year Plan period, the State Grid plans to build the “24 AC and 14 DC” UHV project, involving more than 30000 kilometers of lines, with a total investment of 380 billion yuan. A total of 13 “10 AC and 3 DC” UHV lines are planned to be started in 2022. The acceleration of UHV construction drives the demand growth of maleic anhydride derivative market. In addition, pultrusion has significant advantages in blade girder manufacturing. Methyltetrahydrophthalic anhydride is the preferred choice of pultrusion curing agent, and wind power blades will also become a new downstream application of anhydride that can not be ignored.
The company plans to invest in R & D and pilot test integration projects to continuously develop new products
On January 14, it was announced that Huicheng Research Institute, a subsidiary, planned to invest in the “functional material R & D and pilot test integration project”, with a construction period of two years. The company has outstanding engineering ability. It has successively developed and produced maleic anhydride derivatives such as nadic anhydride and hexahydrophthalic anhydride, OLED intermediate Fluorene Derivatives and hydrogenated bisphenol A. through continuous R & D investment, it is expected to continuously optimize the product structure and enrich the product line.
Risk tip: the production capacity construction progress is less than expected, the downstream application demand is less than expected, and the price of raw materials fluctuates
