Event: the company released its third quarterly report on October 27, 2022. 2022Q3 realized operating income of 842 million yuan, an increase of 35.69% over the same period last year, a net profit of 44 million yuan belonging to shareholders of the parent company, an increase of 282.96%, and a net profit of 43 million yuan, an increase of 527.78% over the same period last year.
Comments:
Product price boom superimposed hydroquinone project volume, the first three quarters of the performance increased greatly. The company achieved operating income of 2.652 billion yuan in the first three quarters, + 39.14% year-on-year, and net profit of 274 million yuan, + 9105.58% year-on-year. Among them, Q3 realized income of 842 million yuan, year-on-year + 35.69%, month-on-month-9.41%; net profit 43.79 million yuan, year-on-year + 282.69%, month-on-month-65.69%. Q3 gross profit margin is 20.14%, net profit rate is 5.2%, respectively, year-on-year + 5.27pct, month-on-month-8.44pct, year-on-year + 3.36pct-8.52pct. The main reasons are the rising prices of some vitamin products and chromate products and the increase in sales of new projects such as "annual production of 20000 tons of catechol and 31100 tons of catechol derivatives-phase I project". According to the average price of vitamin K3, calcium pantothenate, vitamin B1 and nicotinamide in the first three quarters of wind,2022, the average prices were 189yuan / kg, 306yuan / kg, 149yuan / kg and 44 yuan / kg, respectively, which were + 168%, + 318%,-13% and-19% respectively compared with the same period last year. Q3 profit has declined from the previous month, which is expected to be related to the decline in the prices of some products and the slowdown in demand for hydroquinone. According to the average price of wind,Q3 vitamin K3, calcium pantothenate, vitamin B1 and nicotinamide, the average price is 195 yuan / kg, 233,139 yuan / kg, and 34 yuan / kg, which is + 174%, + 215%,-12%,-39%, + 2%,-39%,-8% and-32%, respectively.
The foundation of the transformation is solid and the space is under construction to expand. In recent years, based on vitamins, the company has embarked on the road of transformation and upgrading, and continues to promote fine chemicals represented by flavors and fragrances and pharmaceutical API projects represented by iodine contrast agents. Among them, the "annual production of 20000 tons of hydroquinone, 31100 tons of catechol derivatives construction project-the first phase of the project" was put into production in 2020, and the current production capacity is still being released. The construction of the second phase of the project officially started in the first half of 2022 and is expected to be put into production in the fourth quarter of 2023. After the completion of the second phase of catechol project, the production capacity of 20,000 tons of catechol and hydroquinone and 10,000 tons of vanillin and ethyl vanillin will be formed, which will significantly enhance the comprehensive competitiveness of the company's "catechol" industry chain. Construction project with an annual production capacity of 1000 tons of iodine contrast medium and its intermediates-Phase I project "
The project was put into production in 2020. At present, the main users of iodine contrast agent intermediates have been certified and commercialized, and are promoting the application and approval of API. In addition, the company is also active in the development trend and opportunities of chromate in the field of energy storage. The company's new layout of fine chemicals and pharmaceutical intermediate medicine and other new business, higher added value, better competition pattern, with the gradual realization of performance, the company has a broader space for growth.
Profit forecast: we have adjusted the company's profit forecast based on a change in price assumptions. It is estimated that the company's net profit from 2022 to 2024 is 340 million yuan, 570 million yuan and 680 million yuan respectively (the original value is 510 million yuan, 780 million yuan and 890 million yuan), corresponding to 17 times, 10 times and 9 times of PE respectively, maintaining the "buy" rating.
Risk tips: vitamin product prices decline, fine chemical sector capacity release is not as expected, raw materials rise sharply, API approval and sales are not as expected.