During the epidemic, big-name lipsticks and designer bags are nothing, masks are the well-deserved “C position”. In the context of “a mask being hard to find” in the first quarter, netizens lamented, “I can’t imagine how much profit mask companies made in the first quarter!”
Data map: A mask in Jinxian County, Jiangxi Manufacturing companies are increasing horsepower production. Photo by Wan Zhaohui
Profits of mask manufacturers are rising
A sudden epidemic has made masks a must-have for everyone. The influx of a large number of orders has greatly increased the profits of mask manufacturers.
The first quarter report released by Tianhua Super Clean, a cross-border mask production company, on April 21 showed that the operating income was 232 million yuan, a year-on-year increase of 34.18%; the net profit attributable to shareholders of the listed company was 47.53 million yuan, a year-on-year increase of 47.53 million yuan. An increase of 293.32%.
Tianhua Chaojing said that the market demand for its medical device business has increased significantly after the outbreak. The medical protective products of the company and its subsidiary Wuxi Yushou Medical Device Co., Ltd. are supplies for epidemic prevention and control. In the short term, The domestic medical device business sales revenue and operating profit increased significantly.
The mask manufacturers Yangpu Medical and Ogilvy Medical also benefited from the anti-epidemic. On the evening of April 24, Yangpu Medical released its first quarter report, which showed that revenue was 147 million yuan, a year-on-year increase of 32.81%; net profit was 10.9782 million yuan, a year-on-year increase of 143.35%. On April 28, Ogilvy Medical released its first quarter report, achieving revenue of 598 million yuan, a year-on-year increase of 16.23%; net profit attributable to shareholders of the listed company was 91.1953 million yuan, a year-on-year increase of 64.62%.
Data map: At about 21:00 on April 15, the first meltblown cloth production line in Gansu Province was built at PetroChina Lanzhou Petrochemical Company, and the product rolled off the production line smoothly. Photo by Liu Yanzhi
The performance of melt-blown cloth companies has risen with the rising tide
In addition to mask manufacturers, melt-blown cloth, as the “heart” material of medical masks, is also in short supply. The price of meltblown cloth has increased more than 10 times following the market trend, which has benefited the performance of related companies.
The first quarter report disclosed by Yanjiang Shares on April 27 showed that revenue was 274 million yuan, a year-on-year increase of 17.89%; net profit attributable to shareholders of listed companies was 38.8936 million yuan, a year-on-year increase of 344.81%. It said that the current supply of melt-blown non-woven fabrics on the market is limited, and the melt-blown non-woven fabrics produced by the company have been in short supply, which has become one of the main factors for the growth of this quarter’s performance.
Xinlong Holdings also saw a significant increase in performance due to the increase in market demand for non-woven fabrics. The first quarter report released on April 30 showed that the revenue was 291 million yuan, a year-on-year increase of 30.04%; the net profit attributable to shareholders of the listed company was 58.3537 million yuan, a year-on-year increase of 1545.49%.
In addition, Dawn Co., Ltd., which has attracted market attention for its production of melt-blown cloth materials for masks, released its first quarter report on the evening of April 8, showing that its net profit was 69.3989 million yuan, a year-on-year increase of 91.60%.
Data map: Technical workers are making final adjustments to the mask machine production line. Photo by Jiang Hui
Mask machine companies also made a lot of money
During the epidemic, Sinopec once shouted, “I have meltblown cloth, who has a mask machine?” As a key part of mask production, mask machines that used to sell for 800,000 yuan were sold for 4 million yuan because they were “hard to find”, allowing manufacturers to make a lot of money.
On the evening of April 22, Topstar, which develops mask machines, released its first quarter report, with revenue of 549 million yuan, a year-on-year increase of 70.12%; net profit attributable to shareholders of listed companies was 154 million yuan, a year-on-year increase 298.53%.
Haozhi Electromechanical, which has undertaken the production of some mask machine spare parts, released its first quarter report on April 29, showing that it achieved revenue of 171 million yuan, a year-on-year increase of 115.1%, and net profit attributable to shareholders of listed companies. 14.0454 million yuan, a year-on-year increase of 542.51%.
With the help of masks and other related businesses, the first quarter report released by Yinghe Technology on the evening of April 23 also showed that revenue was 556 million yuan, a year-on-year increase of 21.52%, attributed to shareholders of the parent company The net profit was 153 million yuan, a year-on-year increase of 116.53%.
However, due to factors such as logistics and personnel returning to work, some companies’ mask-related business did not significantly improve their performance in the first quarter, or even declined. For example, Evergreen Co., Ltd., which owns the mask machine business, had a net profit attributable to shareholders of the parent company of 10.5999 million in the first quarter, a year-on-year decrease of 55.01%.
Mask concept stocks have performed brilliantly, and the share prices of many stocks have doubled
The rising performance of mask-related companies has also pushed up mask concept stocks. For example, in the 47 trading days from February 3 to April 9, Dawn shares achieved 21 daily limits and won the title of “The Most Excellent Mask Concept Stock”.
Dawn shares trend chart, as of the close of April 30, Dawn shares rose 0.71%, closing at $32.62 per share, with a market value of 13.3 billion yuan. It has increased by 205.15% since the beginning of the year.
However, because Dawn Shares’ first-quarter performance was far lower than market expectations, some investors ridiculed, “It seems that companies that produce mask melt-blown materials are not as profitable as imagined.” After the financial report was announced, its stock price continued to rise. It fell sharply in two days.
As of April 30, except for Dawn shares, the stock price has doubledAlso doing so is Yanjiang Shares, whose share price has risen 132.93% since the beginning of the year. In addition, TEDA shares, Jiangnan High Fiber and other companies are also favored by investors. TEDA shares have increased by 94.41% since the beginning of the year, and Jiangnan High Fiber has increased by 70.81% since the beginning of the year.
The economy will remain prosperous in the short term, but there may be overcapacity in the long term
Relying on the large number of orders in the first quarter, many mask-related companies have doubled their profits. But in the long term, can the mask business continue to drive performance?
On March 8, Dawn Shares stated in an announcement that the increase in orders for polypropylene melt-blown special materials so far will have a certain positive impact on its operating performance, but as the epidemic is effectively controlled, , it is expected that orders for this product will gradually decrease in the future. “Recently, many companies have newly launched the production of polypropylene melt-blown special materials. The market supply of this product has gradually increased, and the industry has the risk of overcapacity.”
In addition to melt-blown materials, masks are also facing overcapacity. Risks
According to QiChacha Professional Edition data, as of April 4, there were a total of 69,000 companies in my country that included masks in their business scope, of which 19,000 companies were in operation in January. Newly added after the outbreak on the 25th.
Data from the National Development and Reform Commission show that on February 29, the national daily mask output reached 116 million, including ordinary masks, medical masks, and medical N95 masks. In 2019, the total annual mask output in mainland China only exceeded 5 billion.
“For a small number of medical device export companies, such as low-value consumables (masks, gloves, etc.), medical equipment and other products, orders from around the world are currently in short supply. The production capacity of each company is relatively saturated, and exports are expected to be high in the future. The prosperity will last for a long time.” Guosheng Securities analyst Zhang Qiyao pointed out.
“The current situation of the mask sector is that domestic supply tension will gradually ease, overseas demand increases in stages, and the industry will face greater competition pressure in the medium term.” Yang Song, an analyst at Cinda Securities, said that in the future, as many companies As mask production capacity continues to be added, the industry as a whole will face greater pressure from overcapacity. </p
