The volume and price of leading products have risen sharply, and performance increased dramatically in 2022
Incident: On April 25, 2023, Yanggu Huatai released its 2022 annual report and the first quarterly report of 2023:2022 achieved revenue of 3,517 million yuan, an increase of 30.01% over the previous year; achieved net profit of 515 million yuan, an increase of 81.52% over the previous year; and achieved net profit of 505 million yuan after deduction, an increase of 90.77% over the previous year. The gross profit margin was 27.67%, an increase of 484pct over the previous year; the net profit margin on sales was 14.65%, an increase of 4.16pct over the previous year; the net cash flow from operating activities was 335 million yuan, an increase of 124.04% over the previous year.
In 2022 Q4, revenue was 820 million yuan, +9.65% year on year, -6.28% month on month; net profit of the mother was 77 million yuan, +103.01% year on year and -48.49% month on month. The gross profit margin of sales was 27.31%, an increase of 6.99 pct over the previous year, an increase of 1.20 pct over the previous month; the net profit margin on sales was 9.37%, an increase of 4.31 pct over the previous year, and a decrease of 7.67 pct from the previous month.
2023Q1 achieved revenue of 811 million yuan, -5.23% year on year and -1.15% month on month; net profit of the mother was 88 million yuan, -22.12% year on year, +15.22% month on month. The gross profit margin on sales was 25.24%, down 3.50 pct from the previous year and 2.07 pct from the previous month; the net profit margin on sales was 10.92%, down 2.37 pct from the previous year, up 1.55 pct from the previous month.
Comment:
It achieved operating income of 3,517 billion yuan in 2022, an increase of 30.01% over the previous year; achieved net profit of 515 million yuan, an increase of 81.52% over the previous year. In 2022, in the face of complex domestic and foreign economic situations, the company adhered to established development strategies and responded positively to market changes. Operating income and net profit increased significantly over the same period last year. The main reasons were:
1) The company carried out various tasks in an orderly manner according to the annual business plan, increased market development efforts, and sales continued to grow. Domestic revenue was 1,831 billion yuan, +18.63% year on year, and overseas revenue was 1,686 million yuan, +45.13% year on year;
2) Processing additives for leading products, production, sales volume, and sales prices of some high-end high-performance varieties all increased by a certain margin compared to the same period of the previous year, and profit levels rose; 3) At the same time, due to exchange rate fluctuations, exchange income of 41,9059 million yuan was generated during the reporting period, an increase over the same period of the previous year.
The leading position of rubber additives is stable, and the product layout continues to be expanded
2023Q1 revenue declined month-on-month; net profit of the mother was -22.12% year on year, +15.22% month-on-month. According to Zhuochuang information, the average market price of accelerator M in Q1 in 2023 was 15,470.5 yuan/ton, -11.74% year on year; the average market price of accelerator NS was 22787.7 yuan/ton, -13.13% year on year; the average market price of accelerator TMTD was 14,759.8 yuan/ton, -25.92% year on year. Prices of the company's main products fell in 2023Q1, causing operating income and profit levels to drop year on year. At the same time, cost control is good. The 2023Q1 management fee rate was 7.47%, down 2.18 pct from the previous month; the gross profit margin of sales was 25.24%, down 3.50 pct from the previous year, down 2.07 pct from the previous year; the net profit margin on sales was 10.92%, down 2.37 pct from the previous year, up 1.55 pct from the previous year.
Global leader in rubber additives, leading technological innovation capabilities
As a comprehensive rubber additive supplier with anti-scorch agents, accelerators, insoluble sulfur, etc. as core products, the company has strong competitiveness on a global scale. In 2020, the company's anti-coking agents accounted for more than 65.6% of the country's total domestic output, maintaining a leading edge; the company has the National Rubber Additives Engineering Technology Research Center, which attaches great importance to investment in technology research and development and the improvement of independent innovation capabilities. It has formed a professional and stable research team through independent training, introduction of talents, and joint research institutes with universities and research institutes, etc., with independent design and development capabilities. Through continuous technical research, a number of core technologies have been formed.
The successful development of new accelerator M and NS green processes solved the three waste problems that have always plagued the accelerator industry; products such as environmentally friendly homogenizers, continuous high heat stability, high dispersion insoluble sulfur, PK900, TBSI, etc. were successfully localized, breaking foreign technology monopolies.
Focus on the main rubber additives industry and continue to expand product layout
Focus on the main rubber additive industry, do a good job of investing in the technology of existing products, do a good job of continuous optimization and upgrading in product production, environmental protection, equipment automation, intelligence, energy saving, etc., save energy and reduce emissions, reduce production costs, and improve the market competitiveness of existing products. At the same time, break the restrictions of the additive industry, lay out basic chemicals related to big health, do a good job of exploring new fields of fine chemicals, continue to expand new varieties, find new directions, and explore diversified development. In 2023, the company will continue to promote construction work such as the 10,000-ton resin project, the annual output of 65,000 tons of silane coupling agent, the Derrick 10,000 ton rubber anti-coking agent CTP project, the new special silicon material with an annual output of 40,000 tons of trichlorosilicon co-producing 6,500 tons of silicon tetrachloride, and Huatai New Materials with an annual output of 15,000 tons of organic peroxides. The construction and implementation of the project is conducive to enhancing the company's comprehensive strength, market competitiveness and resilience to risks.
Investment advice and profit forecasting
Considering the uncertainty of putting new production capacity into operation, we lowered the company's profit forecast for 2023-2024. The company's net profit for 2023/2024/2025 is estimated to be 561/6888/749 million yuan respectively, corresponding to PE 7, 6, and 5 times. Considering the company's advantages in the rubber additives industry, we maintain the “buy” rating.
Risk warning: the risk of project commissioning falling short of expectations, the risk of falling product prices, the risk of falling product demand, the risk of factory safety and environmental production, and the risk of significant expansion of industry production capacity.