Basic events
The company released the 2021 interim report: 21H1 achieved operating income of 6.549 billion yuan (+41.05%) and net profit attributable to the mother of 584 million yuan (+221.65%); of which Q2 achieved revenue of 3.477 billion yuan (+25.52%), and net profit attributable to the mother was 289 million yuan (+109.67%), and the performance was in line with expectations.
Investment essentials
The price is raised twice in the middle of the year, and the impact of raw materials is controllable
Sub-business point of view, (1) metal packaging products and services: 21H1 achieved revenue of 5.829 billion yuan (+37.93%), accounting for 89.01% of revenue, gross profit margin of 20.52% (-3.72pct); considering the metal packaging business revenue accounted for nearly 90%, with the company's comprehensive gross profit margin as a reference for metal packaging quarterly gross margin, 21Q1 / 21Q2 The company's comprehensive gross profit margin was 20.08% and 17.99%, respectively, year-on-year -1.96%, -3.51%, Gross profit fell month-on-month, the main period of raw materials rose more, 21Q1 / 21Q2 aluminum market reference average price was 16222, 18583 yuan / ton, +20.95% year-on-year, +42.90%, tinplate long-term procurement impact is controllable. The excessive increase in aluminum prices has triggered a bargaining mechanism, and the unit price of the company's two-piece cans has been raised by 10-15% in the middle of the year (10% at the beginning of the year), which basically covers the impact of raw materials. In the context of carbon neutrality, aluminum prices are expected to remain high, but the increase under the bulk price limit is expected to be limited; considering the smooth landing of price increases in the middle of the year, it is expected that the gross profit margin from Q3 will stabilize. (2) Filling service: 21H1 achieved revenue of 102 million yuan (+87.58%), accounting for 1.56% of the revenue, mainly due to the increase in the volume of new and old customers and the utilization rate of capacity utilization during the period. (3) Others: 21H1 achieved revenue of 617 million yuan (+70.48%), accounting for 9.43% of revenue, mainly due to significant recovery in sports business during the period.
The export of two-piece cans is beautiful, and the performance of three-piece cans is stable
(1) Two-piece cans: Domestic sales, the company continued to develop new customers, old customers stable volume, the capacity utilization rate of each factory during the period significantly improved, driving the improvement of the profitability of two-piece cans; exports, due to the repeated overseas epidemics during the period, overseas supply chain repair was interrupted again; superimposed post-epidemic consumption habits changed, overseas two-piece cans demand grew rapidly, in the first half of the year, China's export of two-piece cans was as high as 2-3 billion cans, and the company's export business also recorded better performance, with overseas business income of 33.6 million yuan (+44.94%) during the period. (2) Three-piece cans: Red Bull's business performance is stable, and the impact of trademark disputes is controllable (in May 2021, the company received the "Notice of Resumption of Trial" from the People's Court of Dongcheng District of Beijing, and the trademark dispute is still under trial); the milk powder cans are bound to high-quality customers such as Feihe and Junlebao, and the performance is eye-catching.
Cutting into the big health sector and the integration of the industrial chain are outstanding
On May 19, O.R.G. announced that it signed a strategic cooperation framework agreement with Yunnan Industrial Hemp Industry Investment Co., Ltd., which will carry out strategic complementary cooperation around the coordinated development of the medicinal and food homologous health industry in the industrial hemp industry chain, and then the company officially launched its own brand "Yuanyang Liang Drink", focusing on health drinks. The signing of this strategic cooperation and the launch of the company's own brand once again prove that the integration strength of O.R.G.'s industrial chain has been widely recognized by the industry; on the other hand, O.R.G. took the lead in cutting into the medicinal and food homologous functional beverage track such as industrial hemp through binding cloud industry investment, with a prominent first-mover advantage and is expected to fully share its growth dividends in the future.
Net margin increased year-on-year and cash flow improved significantly
(1) 21H1 company achieved a gross profit margin of 18.98% (-2.73pct), which increased significantly in raw materials during the main period; expense ratio of 7.89% (-6.42pct) during the period, of which the sales expense ratio was 1.08% (-2.49pct), mainly due to changes in accounting standards; management expense ratio of 3.94% (-2.21pct), R&D expense ratio of 0.24% (-0.23pct), financial expense ratio of 2.63% (-1.50pct), expense dilution after high income increase; corresponding to net interest rate of 8.94% (+4.82pct). (2) 21H1 Company's net operating cash flow was RMB784 million, an increase of RMB1.045 billion over the same period last year; the Company's ROE during the Period was 8.51%, an increase of 5.27% over the same period last year. (3) 21H1 company's inventory on the books of 1.354 billion yuan (+0.27 billion yuan compared with the same period last year), inventory turnover days decreased by 7.08 days to 45.48 days year-on-year; accounts receivable 3.021 billion yuan (an increase of 490 million yuan over the same period last year), accounts receivable turnover days decreased by 40.34 days to 76.30 days year-on-year, and operational efficiency improved.
Earnings forecasts and valuations
It is estimated that from 2021 to 2023, the company will achieve revenue of 12.559 / 142.56 / 16.110 billion yuan, an increase of 18.92% / 13.51% / 13.00%; net profit attributable to the mother of 9.26 / 10.62 / 1.174 billion yuan, an increase of 30.94% / 14.68% / 10.49%, corresponding to the current market value PE of 15.33X / 13.37X / 11.78X, respectively. Considering the company's strong position as a leader in the industry and the relatively certain growth of performance, the "buy" rating is maintained.
Risk Warning
Raw materials rose sharply and Red Bull's business was disrupted
Chief Analyst of Light Industry Manufacturing Industry
Master of Engineering, Columbia University, USA. From April 2015 to March 2017, he worked in the research department of China Galaxy Securities, where he was engaged in the research of agriculture, forestry, animal husbandry and fishery industry, and joined soochow Securities Research Institute in April 2017 to engage in light industry manufacturing industry research, and has served as the chief of light industry manufacturing industry since 2018. In 2017, It ranked 5th in the manufacturing industry of New Fortune Light Industry and 3rd place in 2019. In July 2020, he joined the Zheshang Securities Research Institute.
Mobile/WeChat: 18811064824
Ma Li Deputy Director of Zheshang Securities, Head of Large Consumption, Chief Analyst of Textile and Apparel Industry
He holds a bachelor's degree from Nanjing University and a ph.D. in economics from the Chinese Academy of Social Sciences, and currently works at the Zhejiang Securities Research Institute, and has worked for the China Textile Industry Association, China Galaxy Securities Research Department, and soochow Securities Research Institute. In 2019, New Fortune Light Industry and Textile and Garment ranked 3rd, Crystal Ball Textile and Garment Industry Ranked 1st; 2018 Textile and Garment Industry Crystal Ball Ranked 1st; 2016-2017 New Fortune Textile and Garment Industry Ranked 1st; 2015 New Fortune Textile and Garment Industry Ranked 2nd; 2014 New Fortune Textile and Garment Industry Ranked 4th; 2013 New Fortune Textile and Garment Industry Ranked 2nd; 2012 New Fortune Textile and Garment Industry Ranked 4th
Mobile/WeChat: 15601975988
Fu Jiacheng is a researcher in the light industry manufacturing industry
Bachelor of Investment, Master of Central University of Finance and Economics, worked at Soochow Securities Research Institute from July 2019 to May 2020, covering the light industry manufacturing industry, and joined Zhejiang Securities Research Institute in June 2020.
Shuyan Yang, researcher in the light industry manufacturing industry
With a bachelor's degree from Shanghai Jiao Tong University and a master's degree from the Hong Kong University of Science and Technology, he joined the Zheshang Securities Research Institute in March 2021, covering the light industry manufacturing industry.
Mobile/WeChat: 13611883185
Dushan, researcher of light industry manufacturing industry
With a bachelor's degree from Zhejiang University, a master's degree from the University of Illinois and the University of Chinese of Hong Kong, Shenzhen, he joined the Zheshang Securities Research Institute in May 2021, covering the light industry manufacturing industry.
Mobile/WeChat: 15306560432
Disclaimer: The above content is for the reference of institutional investors only and does not constitute investment advice, and the company's value judgment shall be subject to the official report.
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