Main points of investment:

The company issued the 2022 annual report forecast: the net profit of 2022 is about 5.2-560 million yuan, an increase of 83.15%, 97.24% over the same period last year, and the net profit of deducting non-return is about 5.08-548 million yuan, an increase of 91.95%-107.06% over the same period last year. The net profit of 22Q4 is about 0.81-121 million yuan, an increase of 115%, 221%, and a month-on-month decline of 18%, 45%. The net profit of deducting non-return is about 0.73-113 million yuan, an increase of 111%, 227% over the same period last year, and a month-on-month decline of 24%, 51%. The performance is slightly lower than expected.

The high price of anti-coke agent makes a good profit, the profit of insoluble sulfur is slightly repaired, and the exchange loss is a drag on the performance of Q4. The anti-coke agent benefits from the good competition pattern, with the company's market share reaching more than 65%. Since the beginning of this year, the price has been high and stable, which has become the main driving force of performance. The annual sales volume is expected to be about 1.7-18000 tons, and the profit per ton is estimated to maintain about 20, 000 yuan. Due to the scattered pattern, fierce competition and limited product price transmission, the price fluctuation of raw materials is small. According to Baichuan data, the price of aniline in the upper reaches of Baichuan data increased by 10% year on year in 2022. The average price of accelerator M and accelerator NS increased by + 3.3% and-5.4% respectively compared with that of aniline, which increased by 2.2% and 5.6% respectively. In addition, the price of liquid sulfur in 2022 obviously declined after reaching a high in mid-June, and the profit of insoluble sulfur was gradually repaired in the second half of the year. In the second half of the year, the company put into production 40,000 tons of continuous insoluble sulfur, with an estimated output of about 5000 tons per month in 22. On the expense side, affected by the fluctuation of the US dollar exchange rate, Q4 company provides for exchange losses, and the exchange gain of Q3 is about 30 million yuan lower than that of Q3, which has a certain impact on 22Q4 performance.

Increased production capacity of existing products and products under development drive future growth. 40,000 tons of insoluble sulfur has been completed and put into production, which is expected to reach production by 2023, and the production capacity of anti-coke agent is expected to increase by about 3000 tons. In addition, 35000 tons of phenolic resin, 10,000 tons of new binder HMMM and other new auxiliaries projects continue to go through the preliminary formalities and are expected to be put into production by the end of 2023. The company will continue to strengthen the transformation of new auxiliaries from small-scale testing to industrialization, in order to meet the requirements of downstream tire industry for performance improvement and formula optimization, and plans to produce 65000 tons of high-performance rubber auxiliaries and by-product recycling projects per year, including 55000 tons of silane coupling agents and 10,000 tons of by-products propyltrichlorosilane and silicon tetrachloride, which are expected to be gradually put into production in 2024. In addition, organic peroxides and other auxiliaries are scheduled to build a pilot production demonstration line at the end of 2024. In addition, the company conducts laboratory research on lithium electricity new energy-related additives, and is expected to complete pilot trials of vinylidene carbonate and fluoroethylene carbonate in 2023, as well as layout of the antioxidant lipoic acid in the large health field. capacity is expected to be released gradually in the first half of 2023. We believe that in the case of the gradual weakening of the cyclical fluctuation of the profits of traditional auxiliaries, we need to pay more attention to the transformation of the company's achievements in new products, which will achieve multi-point flowering in the future.

Profit forecast and investment rating: taking into account the expenses such as 22Q4 exchange losses and the changes in the production progress of some new projects, the profit forecast for 2022-2024 is adjusted. It is estimated that the three-year return net profit is about 5.5,6.3 and 730 million yuan (the original forecast is 6.00,7.48,823 million yuan), corresponding to 9, 8 and 7 times of PE, and about 15 times of the 23-year average PE of Haili de and True Cheng shares in the upper reaches of tire enterprises. Maintain a "buy" rating.

Risk tips: production of projects under construction falls short of expectations; sales of new products fall short of expectations; large fluctuations in raw materials affect profitability