Core ideas:
The annual performance in 2022 is expected to be 364 million 436 million yuan, and Q4 will make a profit of 0.28 billion yuan in a single quarter.
The company issued an annual performance forecast for 2022, which is expected to achieve a net profit of 364 million to 436 million yuan (+ 45% to 74% compared with the same period last year), and to deduct a net profit of 360 million to 432 million yuan (+ 42 million) for the whole year. Q4 is expected to make a profit of 0.28 billion yuan in a single quarter, and the profit center has declined compared with the third quarter, mainly affected by the epidemic.
The advantage of production capacity dominates the pricing power of the industry, and the product profitability has improved significantly in 2022. The company is the largest industrial fungicide leader of isothiazolinone in Asia, with a production capacity of more than 40,000 tons. The average product price in the first three quarters of 22 years is 385,000 yuan / ton, which is about 50% higher than the company's average sales price of 25300 yuan per ton in 2021. In 2021, the company's gross profit per ton of fungicide products reached 121,000 yuan / ton, and the comprehensive gross profit of Q1-Q3 products reached 255,000 yuan / ton in 22 years.
Sold 82% stake in Shenyang Baiao, a subsidiary, and installed 2023 young people. Shenyang Baiao's main product is the intermediate F nitrile of fungicide BIT. Shenyang Baiao lost 55.97 million yuan in the first three quarters of 2022 and is expected to lose 7000-80 million yuan for the whole year. The company announced the completion of equity transfer and delivery on December 30, 2022, which will help the company to focus on its main business and install 2023 young people.
Benefiting from the recovery of downstream demand, 2023 industrial fungicide products are expected to achieve a stable price increase. In the first three quarters of 22, the company sold 26000 tons of products, and the annual sales are expected to be affected by the epidemic at 3.2-34000 tons, and the sales center is expected to return to the 2020 level only. The downstream of the company is mainly in the fields of industrial water treatment, papermaking, daily chemical, shipbuilding and paints. We believe that with the recovery of downstream construction and the improvement of environmental protection requirements in some industries, there is room for further improvement in the capacity utilization rate of Pine Island Phase III. The company's products are expected to achieve a steady increase in price.
Profit forecast and investment advice. We estimate that the EPS of the company from 2022 to 2024 will be 1.62,1.83,2.09 yuan per share respectively. Give the company a 2023 12XPE valuation with a fair value of 21.98 yuan per share and maintain a "buy" rating.
Risk hint. Product price, exchange rate, raw material price fluctuation and demand lower than expected risk.