Events:
On the evening of October 20th, the company released its third-quarter results report that the company achieved operating income of 2.091 billion yuan in the first three quarters, an increase of 51% over the same period last year, a net profit of 327 million yuan, an increase of 176% over the same period last year, and a net profit of 323 million yuan after deducting it, an increase of 201% over the same period last year.
The price of water treatment agent is rising, the profit is up, and the performance is basically in line with the expected price war, the domestic water treatment agent market pattern continues to optimize, the main supplier of the market only has the company and clear water source, and the company's profitability continues to improve with the upward price of the product. In the first three quarters of 2022, the gross profit margin reached 24.59%, an increase of 7.53pct over the same period last year, and a net profit rate of 15.64%, an increase of 7.07pct over the same period last year, mainly due to the increase in product prices.
The falling price of liquid chlorine is a drag on performance, and the profit of Q4 is expected to be repaired.
The company's chlor-alkali assets started production in May 22, mainly including an annual output of 300000 tons of caustic soda (100%), 250000 tons of liquid chlorine and 7500 tons of hydrogen. Currently, the second phase of operation is 150000 tons / year of ionic membrane caustic soda.
The company's Q3 realized a net profit of 86 million yuan in a single quarter, an increase of 87% over the same period last year, while it decreased by nearly 29% from a month earlier, mainly due to a sharp decline in the price of liquid chlorine. In 2022, the intermediate ex-factory price of Q3 Shandong tablet alkali was 4363 yuan / ton, which was basically the same as that of Q3 liquid chlorine, while the quarterly average price of Q3 liquid chlorine was 108.12 yuan / ton, which decreased by 90%.
Since September, the price of liquid chlorine has been gradually repaired, and the profitability of the company's chlor-alkali project is expected to be improved.
Lithium materials are expected to become the second growth level of the company.
The company seizes the industrial opportunity to cut into the lithium material business. At present, 10,000 tons of lithium iron phosphate and 10,000 tons / year VC project are expected to be put into production, and lithium materials are expected to become the second growth level of the company in the future.
Earnings forecast, valuation and rating
We estimate that the company's income in 2022-24 will be 28.9 shock 45.6 / 6.04 billion yuan respectively, the year-on-year increase will be 30.9%, 52.8% and 32.4%, respectively, and the net profit of return to the mother will be 3.9max 6.2 / 750 million yuan, respectively, and the year-on-year growth rate will be 39.8%, 58.7% and 20.8%, respectively, and the corresponding EPS will be 1.8,2.90 and 3.50 yuan respectively. The current share price corresponds to PE of 14x, 9x and 7x, respectively. In view of the continuous improvement in the company's main business structure-new energy materials open room for growth, we maintain the company's target price of 36.00 yuan and maintain the "buy" rating.
Risk hint: the risk that the business expansion of lithium materials is not as expected; the risk of chlor-alkali project operation is not as expected.