NOVEL(002014) EBSCN·2025-05-15 10:20Investment Rating - The report assigns a "Buy" rating to the company, Yongxin Co., Ltd. (002014.SZ) [3][13] Core Viewpoints - Yongxin Co., Ltd. is a leading domestic soft plastic packaging company with a long-term stable growth in performance, projecting a revenue CAGR of 7.1% and a net profit CAGR of 12.9% from 2018 to 2024 [2][22] - The company operates in a billion-dollar market, with the domestic plastic soft packaging market reaching approximately 120.5 billion RMB (17.22 billion USD) in 2023, and is expected to grow at a CAGR of 7.2% from 2024 to 2027 [2][69] - The company has four key highlights that underscore its long-term investment value: strong demand linked to essential consumer goods, a rising gross margin due to vertical integration and product innovation, robust profitability metrics, and a solid dividend policy with an average payout ratio exceeding 70% since its listing [2][3][14] Summary by Sections Company Overview - Yongxin Co., Ltd. specializes in high-tech products such as vacuum coating, multifunctional films, and composite packaging materials, with a production layout centered in Huangshan and extending to Guangdong, Hebei, and Shaanxi [22][23] - The company has shown consistent revenue growth, with 2023 revenue reaching 3.379 billion RMB, and a projected revenue of 4.541 billion RMB by 2027 [7][43] Market Size and Industry Concentration - The plastic soft packaging market is characterized by stable long-term demand, with advantages such as low cost and practicality leading to its replacement of other packaging forms [2][64] - The market is expected to see increased concentration as the demand for safety, environmental protection, and innovation rises, favoring leading companies [2][64] Investment Highlights - The company benefits from a diversified customer base across essential sectors such as food, pharmaceuticals, and daily chemicals, providing a degree of demand stability [2][14] - The gross margin is expected to rise due to the company's focus on high-margin overseas business and product innovation [2][10] - The company's return on equity (ROE) and net cash ratio are positioned favorably within the industry, indicating strong profitability [2][14] Profit Forecast and Valuation - The report forecasts net profits of 511 million RMB, 569 million RMB, and 638 million RMB for 2025, 2026, and 2027 respectively, with corresponding earnings per share (EPS) of 0.83, 0.93, and 1.04 RMB [3][7] - The current price-to-earnings (P/E) ratio is projected to be 13, 12, and 10 for the years 2025, 2026, and 2027, respectively, indicating a favorable valuation [3][7] Catalysts for Stock Price Increase - Short-term catalysts include the current downtrend in domestic interest rates, making high-dividend stocks more attractive [12] - Long-term catalysts involve the ongoing shift towards soft plastic packaging and the trend towards recyclable and renewable materials, which will likely benefit leading companies [12][14]