Chapter 283 Looking for opportunities in the most popular sectors

November 27, 2023 is Monday. Through the weekend review, Yuansheng discovered a good stock in a hot sector. Please take a look at its information----------------- --------------------------

An enterprise with advantages in high-barrier industrial flexible packaging, first-class customers build the company's moat: Hujiang Materials was established in 1995 and entered the field of industrial special packaging in 2002. The company's main products include five series of products: aluminum-plastic composite heavy-duty bags, aluminum-plastic composite inner bags, PE heavy-duty bags, PE inner bags, and functional films. They are mainly used in chemical industry, food, medicine, high-purity metals, precision instruments and other products. of special packaging, its main customers include multinational companies such as BASF and DSM, and it has been the number one supplier of BASF's packaging procurement in China for many years. The company achieved operating income of 231 million yuan/166 million yuan respectively in 2020/2021H1, achieving year-on-year growth of 11.27%/65.85% respectively; in 2020/2021H1, it achieved net profit attributable to the parent company of 32.67 million yuan/24.63 million yuan, respectively, achieving year-on-year growth of 13.58%/ 64.24%, both revenue and net profit achieved rapid growth. The company's comprehensive gross profit margin in 2020/2021H1 was 36.15%/34.28% respectively, and the gross profit margin over the years has remained around 35%.

The industry has a wide range of downstream applications, and the polarized large and medium-sized enterprises in the industry have high competition: the plastic packaging industry has a wide range of downstream applications, mainly including chemical industry, food, medicine and other fields, and is the category with the second highest proportion of packaging materials. According to BIS forecasts, my country's plastic packaging demand will increase from US$47.7 billion in 2019 to US$58.2 billion in 2025, with an average annual compound growth rate of 3.38%. Due to the relatively low threshold and the large number of companies in the industry, the packaging industry is completely competitive. According to data from the China Packaging Federation, as of 2017, there were 1,604 plastic packaging companies above designated size in my country. The leading position in the segmented track builds a relative advantage in gross profit margin: the company is mainly engaged in the research, production and sales of high-barrier industrial flexible packaging. There are few comparable companies in the industry segment, so the scope of comparable companies is expanded to the packaging industry, and Zijiang Enterprise and Yongxin are selected Co., Ltd., Prince New Materials and Huanshen Co., Ltd. are comparable companies. From a scale perspective, the company's revenue and profit scale are relatively small compared to peers listed on the main board. From the perspective of gross profit margin, the gross profit margin of major companies in the industry is in the range of 15%-25%, and the main products are general consumer goods packaging; because the company's downstream customers are mainly in the chemical industry, they have relatively high requirements for packaging performance. The gross profit margin has been around 35% for several years, which has certain advantages over comparable companies in the same industry.

The company is deeply involved in the high-barrier industrial flexible packaging industry and is a leading enterprise in the domestic high-barrier industrial flexible packaging industry. It has been the number one supplier for major customers such as BASF in China for related packaging procurement for many years. It has strong customer stickiness and is expected to benefit from Steady growth in the packaging industry. From a valuation perspective, the average valuation of comparable companies is 24XPE and 2.8XPB. Among them, the highest valuation is Zixin Materials (an integrated supplier of new environmentally friendly packaging materials), with a PE-TTM of 42 times... ................................................................. ................................................................. ................................................................. ........

It is Hecai stock.

Write in the evening.

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