The annual performance reached a new high, the project construction was orderly, and the "buy" rating was maintained.

In 2022, the company achieved revenue of 13.039 billion yuan, year-on-year + 30.6% (adjusted, the same below); net profit of 3.807 billion yuan, + 26.1% year-on-year; Q4 single-quarter revenue of 2.55 billion yuan, year-on-year-9.0%, month-on-month-15.5%; return-home net profit of 380 million yuan, year-on-year-62.4%, month-on-month-52.2%. Taking into account the business cycle of Lian Alkali and glyphosate, we downgrade the profit forecast for 2023-2024 and add 2025. It is estimated that the company's 2023-2025 net profit will be 29.81,30.52,34.24 (original value 52.46,58.08) billion yuan, corresponding to EPS 0.34,0.35,0.39 (original value 0.59,0.66) per share, and the current stock price corresponding to PE is 9.5,9.3,8.3 times. We are optimistic that the company will steadily promote the construction of N-wafer and double glyphosate projects and maintain the "buy" rating.

The average prices of Lianalkali, diglyphosate and glyphosate have increased significantly compared with the same period last year, and the company has made a lot of profits.

In 2022, the company sold 132.6, 138.6, 8.7 and 51000 tons of soda ash, ammonium chloride, diglyphosate and glyphosate respectively, with revenue of 32.3,16.4,28.0 and 2.94 billion yuan, with an average price of 2437.41, 1183.85, 32234.75 and 58062.07 yuan per ton. year-on-year + 27.45%, + 40.71%, + 47.29%, + 41.75%, respectively The gross profit margins of Lianalkali and double glyphosate / glyphosate reached 40.84% and 49.24% respectively, + 6.4% and + 11.1% respectively over the same period last year, driving the overall gross profit margin to 42.85% and the net profit rate to 29.22%, + 0.9% and-1.5% respectively compared with the same period last year. The company's profitability has been significantly enhanced. The company plans to distribute a cash dividend of 0.45 yuan (including tax) for every 10 shares, and a cash dividend of 390 million yuan (including tax), accounting for 10.31% of the net profit of 2022. Stable dividends for two consecutive years highlight the value of long-term investment.

Process optimization of double glyphosate project, newly established Wujun photovoltaic to improve the layout of new energy photovoltaic industry chain

In 2022, the company's R & D expenditure was 67.934 million yuan, an increase of 103.92% over the same period last year, mainly due to the company's new R & D expenditure on the double glyphosate continuous production process project. It is expected that the product cost, environmental protection and other advantages will be further improved, laying a solid foundation for the company's annual production of 500000 tons of double glyphosate project. Wujun Guangneng, a subsidiary of the company, is planned to be spun off to be listed on the main board of the Shanghai Stock Exchange, and the company will still have a controlling stake after the spin-off; in addition, the company invests in photovoltaic wafers, photovoltaic glass and module projects, and newly established Wujun photovoltaic construction company in order to improve the layout of the new energy photovoltaic industry chain, mainly engaged in downstream distributed photovoltaic EPC, is expected to better realize the connection between the upstream and downstream business of the company's photovoltaic industry chain. We are optimistic about the company's resources, cost, industrial chain advantages and integration advantages, and we can expect to grow in the future.

Risk hints: product prices have fallen sharply, project construction is not as expected, and the risk of unsuccessful spin-off and listing.