Description of the event

On the evening of April 26, the company released its 2022 annual report and the report for the first quarter of 2023. It achieved operating income of 681 million yuan for the full year of 2022, an increase of 21.37% over the previous year; realized net profit of 152 million yuan, an increase of 13.54% over the previous year; realized net profit of 127 million yuan after deducting non-Gumo, a decrease of 1.78% over the previous year; and achieved basic earnings of 0.90 yuan/share per share. The first quarter of 2023 achieved operating income of 123 million yuan, a decrease of 30.81% over the previous year; realized net profit of 0.2 million yuan, a decrease of 93.85% over the previous year; and realized net profit of the non-return mother was 0.1 million yuan, a decrease of 96.12% over the previous year.

Mobile Source's out-of-stock molecular sieve sales region expanded to the world. Q4 performance reached a record high in a single quarter, and Mobile Source's out-of-stock molecular sieve sales region expanded to the world, and Q4's performance reached a record high in a single quarter. Revenue for the full year of 2022 was 681 million yuan, an increase of 21.37% over the previous year; realized net profit of 152 million yuan, an increase of 13.54% over the previous year; net profit of non-return mothers was 127 million yuan, a decrease of 1.78% over the previous year. Looking at a single quarter, the company achieved revenue of 272 million yuan in Q4 2022, an increase of 113.26% over the previous year, an increase of 240.35%; achieved net profit of 65 million yuan, an increase of 268.55% over the previous year, an increase of 503.01% over the previous quarter, and achieved revenue of 123 million yuan in the 2023 Q1 quarter, a decrease of 30.81% over the previous year, a decrease of 54.67% over the previous year; it achieved net profit of 0.2 million yuan, a decrease of 93.85% over the previous year, a decrease of 96.86% over the previous quarter. On November 21, 2022, the company signed a procurement agreement with BASF to update the product types of the 2017 raw material procurement contract. Various product procurement matters, including the upgraded and iterative mobile source denitrification molecular sieve, were agreed upon. Among them, the company's product sales area expanded from the original Asia-Pacific region to a global scale, and the company's Q4 large-scale supply to BASF led to a sharp increase in Q4 performance, but due to factors such as repeated epidemics, overseas inflation, and domestic economic recovery falling short of expectations, the company's Q1 performance was under pressure. Furthermore, the company's Q1 performance was under pressure. Furthermore, the company's product sales area expanded from the original Asia-Pacific region to a global scale. In addition, the company's product sales area expanded from the original Asia-Pacific region to a global scale. In addition, the company's Q4 large-scale supply to BASF led to a sharp increase in Q4 performance due to factors such as repeated epidemics, overseas inflation, and domestic economic recovery falling short of expectations. Furthermore, the company's Q1 performance was under pressure. Furthermore, the company's product sales Free downstream sample delivery, increased remuneration for imported talents, and continued increases in R&D investment have led to an increase in the company's four fees overall. As the epidemic gradually eases and downstream demand recovers, the company's performance is expected to resume growth.

Increase the layout of environmentally friendly new materials and continuously optimize the product matrix

Add high-tech fine chemicals and catalyst products to continuously optimize the product matrix.

The company used the excess funds raised to supplement the “Environmental New Materials and Intermediates Project”, adding fine chemicals such as metocresol, special TRH molecular sieve products, and metal catalyst products such as ferromolybdenum catalysts, nickel-copper catalysts, maleic anhydride catalysts, etc. to the content of the original project (fixed-source denitrification molecular sieves, VOCs catalysts, ethylene glycol catalysts, etc.) to the original project content (fixed-source denitrification molecular sieves, VOCs catalysts, ethylene glycol catalysts, etc.). The company's new products have high technical content and broad market space. The company has rich talents and technical reserves. The adsorption and desorption process developed independently by the company solved the separation problem of meta-cresol and para-cresol, cooperated with large domestic chemical enterprises to gradually replace imported metal catalysts from abroad. The company continues to lay out the field of environmentally friendly new materials, which is beneficial for the company to seize the opportunity in market competition.

The HPPO method combines a rich product matrix to provide impetus for performance growth. The HPPO method production expansion cycle is approaching, and the rich product matrix provides impetus for performance growth. The 2023 HPPO law will enter a production expansion cycle, and the company has formed stable cooperation with Satellite Chemical, Gishin Chemical, etc. As HPPO production capacity is put into operation one after another, the company's titanium silicon molecular sieve is expected to achieve rapid growth. At the same time, the company's core products and technologies are all independently developed. In addition, the company has also signed strategic cooperation agreements with many well-known universities in China. This “independent research and development is the main focus, and industry-university-research cooperation is complemented” R&D model can give full play to the synergistic effect. The company has now formed many technical reserves such as MTO and MTP catalysts, and is also actively deploying various fields such as fixed-source denitrification molecular sieves, ethylene glycol catalysts, photocatalytic catalysts, etc. As the company's projects are put into operation one after another, a rich product matrix will also provide impetus for the company's performance growth in the future.

Investment advice

We expect the company's net profit to the mother in 2023-2025 to be 183 million, 272, and 422 million yuan respectively (originally 2023-2024 were 284 million yuan and 410 million yuan respectively), with year-on-year growth rates of 20.4%, 48.8%, and 55.4%. The corresponding PE is 23, 16, and 10 times, respectively. Maintain a “buy” rating.

Risk warning

(1) Project commissioning progress falls short of expectations;

(2) Product prices fluctuate greatly;

(3) the risk of force majeure of the device;

(4) The risk of changes in environmental policies;

(5) Growth risk of customers being too concentrated.