Brief performance review
On April 24, the company released its 2022 annual report and the first quarterly report of 2023. The company achieved revenue of 1,134 million yuan in 2022, +28.82% year on year, and net profit of 302 million yuan, or -5.55% year on year. The first quarter of 2023 achieved revenue of 227 million yuan, or -31.12% year on year; the net profit of the mother was 55 million yuan, -42.59% year on year. The performance was in line with expectations.
Management analysis
Sales of the company's core products remained stable, and raw materials and prices declined year-on-year. The company's core products, functional additives and phenylchlorosilane, achieved sales of 10,931 tons and 2,710 tons respectively in 2022; during the reporting period, the price of the company's functional additives was 792,000 yuan/ton, +22.79% over the same period last year, and the price of phenylchlorosilane products was 55,800 yuan/ton, +1.97% over the same period last year. In terms of raw materials, the price of the company's raw material trimethylchlorosilane was 35,400 yuan/ton, +57.33% year on year, and the price of benzene chloride was 7,300 yuan/ton, -3.95% year on year. In the first quarter of 2023, the price of the company's functional additives products was 70,000 yuan/ton, -9.79% year on year, and the price of phenylchlorosilane was 45,500 yuan/ton, -20.88% year on year; in terms of raw materials, trimethylchlorosilane was 26,800 yuan/ton, -10.37% year on year, benzene chloride 5,300 yuan/ton, -32.05% year on year.
The application range of hexamethyldisilazane and vinyl double seals continues to expand. The use of hexamethyldisilazane as a stabilizer in lithium battery electrolytes can improve the electrochemical performance and circulation performance of lithium-ion batteries. Its application in the field of new energy continues to expand. Furthermore, the company's profit structure will continue to be optimized when the company's electronic-grade hexamethyldisilazane is put into operation and sales. In terms of vinyl double seals, vinyl double seals are mainly used as sealing agents to produce a series of products such as high temperature vulcanized silicone rubber, molded silicone rubber, silicone gel, and vinyl silicone oil.
Phenylchlorosilane production expanded and extended downstream. In terms of phenylchlorosilane, the company's phenylchlorosilane plant has undergone technical improvements, and overall production has increased. Looking at the long term, the company will further expand from phenylchlorosilane products to phenyl resins, phenyl silicone oil and phenyl silicone rubber. With the commissioning of the company's phenylchlorosilane downstream products, the company's industrial chain will be further extended, which is conducive to long-term growth.
Profit Forecasts, Valuations, and Ratings
Considering the decline in the price of the company's products, we expect the company's net profit forecast for 2023-2025 to be 2.87, 339 and 395 million yuan respectively, and the EPS is 1.27, 1.50 and 1.75 yuan respectively. The current market capitalization corresponding to PE is 19.72X, 16.73X and 14.35X respectively, maintaining the “buy” rating.
Risk warning
There is a risk of product prices falling, and there is a risk that raw material prices will fluctuate greatly; the progress of new projects falls short of expectations.