Incident: The company released its 2022 annual report, achieving revenue of 1,597 million yuan, an increase of 14.62% over the previous year; net profit of 422 million yuan, an increase of 67.14% over the previous year; after deducting net profit of 406 million yuan from non-return mothers, an increase of 72.64% over the previous year. 2022Q4's single-quarter revenue was 397 million yuan, down 6.33% from the previous year and up 4.27% from the previous quarter; net profit after deducting non-return to the mother was 101 million yuan, up 44.81% year on year and down 5.41% month on month.
Prices of acid anhydride products have declined along with raw materials, and wind power has become an important growth area. Revenue from acid anhydride derivatives in 2022 was 1,244 million yuan, up 20.89% year on year; 2022H1 and H2 were 635 million yuan and 588 million yuan respectively; sales volume was 67,600 tons, up 6.20% year on year; 2022H1 and H2 were about 30,000 tons and 37,600 tons respectively, and production capacity of 20,000 tons of methyltetrahydrophthalic anhydride expansion project in the second half of the year was released; the average price of 2022H1 and H2 was about 22,000 yuan/ton, 15,700 yuan/ton, respectively, products Prices fell along with the prices of raw materials. The average purchase prices for the main raw materials of 2022H2 (maleic anhydride and butadiene) were 6,356.15 yuan/ton and 6,633.11 yuan/ton respectively, down 31.07% and 3.56% respectively from 202H1. The wind power sector sold more than 6,500 tons in 2022, accounting for about 10% of total sales. 2022H1 and H2 were about 3,000 tons and 3,500 tons respectively, driven by increased installed capacity in the second half of the year.
The OLED intermediates business is expected to benefit from the panel recovery. In 2022, functional material intermediates revenue was 212 million yuan, up 5.9% year on year; gross profit margin was 35.38%, down 5.45 pct from 2021, mainly affected by weak consumer terminals. As the panel industry recovers and the relationship between supply and demand improves, the OLED intermediates business is expected to return to a growth path, and business profits will also be repaired. At the same time, the company will increase research in the fields of optoelectronic materials, packaging materials, special resins and pharmaceutical intermediates, and the product range is expected to be further enriched.
Investment advice: The company is a leader in maleic anhydride derivatives in China. Benefiting from increasing investment in smart grids and ultra/UHV transmission lines, the promotion of wind power energy across the country, and the widespread application of new composite materials, downstream demand continues to grow. We maintained the company's 2023-2024 net profit forecast of 501 million yuan and 655 million yuan, and added the 2025 net profit forecast to 726 million yuan, maintaining the “increase in holdings” rating.
Risk warning: risk of company project construction being slower than expected; risk of fluctuations in raw material prices; risk of downstream application demand falling short of expectations