Zhongqi New Materials (001212.SZ), which just went public, delivered an excellent third-quarter report with both revenue and net profit growth. According to the company’s third-quarter report released on October 25, the first nine months of this year , The company achieved operating income of 513 million yuan, a year-on-year increase of 42.41%; realized a net profit of 104 million yuan, a year-on-year increase of 12.16%, with gratifying results.
Zhongqi New Materials was established in March 2007, and its main products (artificial quartz stone plates and artificial quartz stone countertops) are widely used in interior building decoration fields such as kitchens, bathrooms, hotels, shopping malls and so on. On August 23 this year, Zhongqi New Materials was listed on the main board of the Shenzhen Stock Exchange and became the “first share of artificial stone” in A shares.
The IPO observation research report recently released by Zhongtai Securities pointed out that Zhongqi New Materials is a supplier of major domestic well-known custom home furnishings, kitchen and bathroom and foreign quartz stone brand enterprises. It is a participating unit of many national and industry standards. Promoted the standardized development of China’s artificial quartz stone industry.
Steady growth in performance and continuous improvement in profitability
In recent years, Zhongqi New Materials has maintained a steady growth in performance. According to its previous IPO prospectus, from 2017 to 2020, the operating income of Zhongqi New Materials increased slightly, and the net profit increased from 79 million yuan to 137 million yuan, with a CAGR of 20.14% and continued improvement in profitability.
Judging from the current performance disclosure, after the listing, the performance of Zhongqi New Materials has continued the previous steady trend. In the first three quarters of 2021, it achieved operating income of 513 million yuan, a year-on-year increase of 42.41%; realized a net profit of 104 million yuan, a year-on-year increase of 12.16 %; Among them, the revenue and net profit in the third quarter were 198 million yuan and 41.249 million yuan respectively, an increase of 31.19% and 1.43% respectively year-on-year.
The Securities Times also pointed out in its report that in the first three quarters of this year, the operating income of Zhongqi New Materials increased rapidly, and the market penetration rate continued to increase; at the same time, the pressure of raw material prices (resin and other raw materials increased by about 30% during the third quarter) Under the circumstance, net profit maintained positive growth, demonstrating good market bargaining power.
According to the prospectus, the main products of Zhongqi New Materials are artificial stone slabs and countertops. At present, the main purpose is to be used as kitchen countertops. In addition, it can also be applied to sink countertops, restaurant tabletops, various front desks, bar counters, wall surfaces, and window sills. The interior decoration of residential and public buildings such as floors, stairs, etc.
Prosperous industry prospects are expected to release growth space
The market demand for artificial stone, the main product of Zhongqi New Materials, is highly related to downstream residential decoration, public building decoration and other industries. From the perspective of artificial quartz stone, Zhongqi New Materials is expected to continue to release growth space.
In the prospectus, Zhongqi New Materials quoted statistics released by the China Building Decoration Association, showing that in recent years, the scale of China’s residential decoration market has continued to expand. The output value has increased from 0.85 trillion yuan in 2008 to 2.04 trillion yuan in 2018. The scale has expanded by 1.19 trillion yuan, with a compound growth rate of 9.15%.
At the same time, the prospectus also pointed out that under the guidance of the policy of improving the basic public service system and coordinating the construction of public service facilities, the number of public service facilities in China has also shown a steady growth trend, and the urban commercial and consumer markets have also shown a prosperous trend. .
In fact, according to multiple announcements of listed companies in the home building materials category, it is inevitable that artificial stone has become the development trend of the industry. Based on the statements of these companies, it can be found that due to the impact of environmental protection policies, natural stone mining is restricted, and the stone is constantly depleted. It has become a trend that artificial stone gradually replaces natural stone. Among them, artificial quartz stone has become a new trend due to its excellent wear resistance and hardness. One of the green building decoration materials.
This trend can also be found from the downstream customers of Zhongqi New Materials: According to the disclosure, the main customers of Zhongqi New Materials in recent years have almost included all listed companies of custom home furnishings, including gold kitchen cabinets, Zhibang Home Furnishings, Oupai Home Furnishings, Shangpin Home Delivery, Sophia, Holaike, Wole Home Furnishings and other first-line home furnishings, and entered the supplier system of domestic well-known companies such as Vanke Group, Jinmao Group, Sunac Group, etc.; its major customers also include foreign brands such as LG Hausys, Ltd. .
Focus on technology and product research and development, with obvious competitive advantages
The stable customer base guarantees the stable business performance of Zhongqi New Materials, which has benefited from the continuous investment of Zhongqi New Materials in product development and production optimization over the years.
It is understood that the technical indicators of the artificial quartz stone industry mainly involve physical strength, deformation resistance, abrasion resistance, thermal expansion, etc., in addition to decorative properties such as color and beauty. Only after a long time of experience and technology accumulation can we achieve the inclusiveness of various technologies and produce high-quality artificial quartz products. This is an important aspect of corporate competitiveness and a major barrier to the high-end market.
In this regard, industry leaders represented by Zhongqi New Materials, while continuously improving product performance and maintaining their own development through continuous R&D investment, are also leading the fashion trends and production technology innovations of the entire industry.
At the same time, the production of artificial quartz stone has the characteristics of multiple batches and multiple models. Different types of products have different raw material formulas. There can be as many as hundreds of raw materials required in daily production. It requires production enterprises to have both large-scale production and flexibility. Resilience.
Therefore, how to further improve production management, improve production technology, and achieve large-scale production while meeting the diverse needs of customers has a direct impact on the production cost and efficiency of the artificial quartz stone industry.
In this regard, Zhongqi New Materials also enhances the company’s product and manufacturing advantages through its self-developed automated production line. It can provide customers with artificial quartz slabs of different specifications; at the same time, its latest automated production line is equipped with a customized MES production management system. It can track and monitor the production status of each process online to plan production, improve efficiency and quality qualification rate.
According to the analysis of the Zhongtai Securities Research Report, after more than 10 years of research and exploration and experience summary, Zhongqi New Materials independently developed an automated quartz stone production line, breaking the international technology monopoly, greatly improving product production efficiency and product delivery capabilities, and reducing production. Line labor requirements have improved the clean production environment, and the use of automated production lines for large-scale production has effectively improved the company’s product quality and performance, as well as the stability and consistency of patterns and textures, and brought the overall improvement of the company’s product competitiveness.
In addition to product advantages and advanced automated production line advantages, in fact, Zhongqi New Materials has industry-leading advantages in R&D and design, customer service, and operation management. These advantages have become an important driving force for the company’s long-term development.
Statistics show that as of now, Zhongqi New Materials has obtained 6 invention patents, 29 utility model patents, and 12 computer software copyrights.
Optimize production capacity layout and consolidate dominant position
It is worth noting that, according to a report by the Securities Times, Zhongqi New Materials was awarded the “2021 Foshan Municipal Government Quality Award” by the Foshan Municipal People’s Government, which is the highest award in the quality field established by the Foshan Municipal People’s Government.
In fact, after years of development, Zhongqi New Materials has won countless honors. For example, it has been awarded as “Vice President Unit of Kitchen and Bathroom Engineering Committee of China Building Decoration Association” and “Vice President Unit of Artificial Stone Association of China Building Materials Federation” “, “China’s top 100 kitchen and bathroom enterprises and top ten enterprises in accessories”, “the preferred brand of countertops for the construction of the national cabinet industry quality integrity system of the Federation of Industry and Commerce”, “Nest Building Award”, the preferred stone brand of the Asia-Pacific Designers Conference, etc.
It is understood that as a leading company in the industry, Zhongqi New Materials has actively participated in the formulation of industry-related product standards for many years. It is the editor-in-chief of “Artificial Quartz Slabs for Building Decoration (JG/T 463-2014)” (GB/T 35157-2017)”, “Synthetic Stone Test Method Salt Spray Aging Test (GB/T35464-2017)”, “Artificial Stone (JC/T 908-2013)” and other national and industry standards unit.
While leading the development of the industry, Zhongqi New Materials also faces disadvantages such as insufficient production capacity and incomplete production area layout. Therefore, expanding production capacity and optimizing layout are particularly important in the process of development and growth.
According to the analysis in the research report of Shenwan Hongyuan, Zhongqi New Materials will break through the company’s production capacity bottleneck with its listed investment projects, optimize the regional layout, improve the company’s scientific and technological research and development strength and management information level, expand market share, and further consolidate the company’s core competition force.
In the future, Zhongqi New Materials will be committed to providing domestic and foreign customers with high-quality, beautiful and durable artificial quartz products. While consolidating the existing market advantages, it will further expand the market and enhance its competitiveness, and strive to become a leader in China’s quartz stone industry. Leading company.
According to the Securities Times, the opening of the industry space has spawned a large number of small and medium-sized artificial quartz stone enterprises, and the current industry concentration is relatively low. With the gradual increase in the requirements for the health, environmental protection and artistic fashion of artificial decorative materials, the backward production capacity is gradually eliminated. As a leading company in the subdivision of the track, Zhongqi New Materials is expected to benefit from the process of increasing industry concentration, continue to consolidate and develop business space, and gradually grow into the “hidden champion” of Chinese manufacturing companies in this field.Return to Sohu to see more
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