event:
On April 20, 2021, the company released its 2020 annual report. In 2020, the company will achieve a total revenue of 1.302 billion yuan, up 7.29% year on year; The net profit attributable to shareholders of the listed company was 85 million yuan, up 14.53% year on year. On a quarterly basis, the company achieved an operating income of 428 million yuan in the fourth quarter, up 21.97% month on month; The net profit attributable to the parent company was 25 million yuan, down 14.68% month on month.
Comments:
The production and sales volume of the company's main products increased significantly, and the cost increase led to a year-on-year decrease in gross profit margin. In 2020, the company's ACR processing aids and impact modifiers will achieve an operating revenue of 780 million yuan (YoY+1.67%), an operating cost of 609 million yuan (YoY+3.62%), and a gross margin of 21.90% (YoY - 1.47%); MBS impact modifier achieved an operating revenue of 418 million yuan (YoY-2.13%), an operating cost of 326 million yuan (YoY+4.06%), and a gross margin of 21.90% (-4.64%); MC impact modifier achieved an operating revenue of 93.4681 million yuan.
The substantial growth of production and sales led to the year-on-year growth of operating costs. In terms of sales volume, the company's sales volume of PVC additives in 2020 will be 114900 tons (YoY+35.65%), including 67800 tons of ACR additives and 36900 tons of MBS impact modifier. In terms of output, the output of PVC additives is 118500 tons (YoY+41.19%), including 68000 tons of ACR additives and 40200 tons of MBS impact modifier. In the second half of 2020, affected by the price of raw materials, the company will correspondingly raise the price of ACR additives, with an average of 11650.65 yuan/ton, an increase of 3.15% over the first half of the year, which will affect the growth of operating revenue. In the middle of 2020, the first phase project of the company with an annual output of 40000 tons of MBS was completed. In order to expand its market share, the company appropriately reduced the selling price of MBS impact modifier. The average selling price in the second half of the year was 11075.18 yuan/ton, down 5.20% from the first half of the year, affecting the decline of operating income. During the reporting period, the growth rate of operating costs of major products was higher than that of revenues, resulting in a year-on-year decrease in gross profit margin.
The production capacity has been greatly improved, and the company's future profitability is strong. At present, the company's comprehensive capacity has reached 140000 tons, including 70000 tons of ACR products, 50000 tons of MBS products and 20000 tons of MC products.
The company has a large investment in fixed assets and a large number of projects under construction. It is estimated that in 21 years, the second phase of the 40000 ton MBS impact modifier project (20000 tons/year), the 40000 ton MC impact modifier (second phase) project (20000 tons/year), the 60000 ton biodegradable polymer material PBAT (first phase) project, the 20000 ton Linyi Ruifeng epoxy chloropropane project Linyi Ruifeng 30000 tons/year ACR processing impact modifier expansion project. In 22, the project of biodegradable polymer material PBAT (Phase II) with an annual output of 60000 tons will be built. Therefore, it is estimated that the company's ACR capacity will reach 90000 tons/year, MBS capacity will reach 70000 tons/year, MC capacity will reach 40000 tons/year, PBAT capacity will reach 60000 tons/year, and ECH capacity will reach 20000 tons/year in 2021. In 2022, the PBAT capacity will reach 120000 tons/year. The profitability of the company is expected to be further improved after the planned project is put into production in the future.
The demand for PVC additives is growing steadily, and PBAT business has broad prospects. At present, the main business of the company is PVC additives. At the same time, the company is actively distributing PBAT production, and there is a large space for future demand growth. With the development of the real estate industry and the expansion of PVC downstream applications, the demand for high-performance PVC products has increased. In recent years, China's PVC production and consumption have shown a steady growth. In 2016-2019, the PVC production CAGR was 6.41%, and the apparent consumption CAGR was 7.33%. The demand for PVC additives used for processing and modification of PVC products will have a large growth space. In terms of PBAT, according to our estimation, with the implementation of relevant national policies, the demand for degradable plastics in the four fields of takeout, express delivery, agricultural film and packaging bags will reach about 2 million tons in China, of which the demand for PBAT is expected to reach 1.49 million tons, with a large market growth space in the future.
Investment suggestion: With the increase of the company's product price and the gradual production of projects under construction, we will adjust the company's net profit from 158/299 million yuan to 162-307 million yuan in the 21-22 years, and it is estimated that the net profit for the 23 years will be 504 million yuan, maintaining the company's "buy" rating.
Risk tip: the macro-economy is not as expected; The price of raw materials is lower than expected; The project construction is not as expected
