Event: in the first half of 2023, the company realized operating income of 960 million yuan, year-on-year-3.11%; net profit of 114 million yuan, + 0.44%; and net profit of 113 million yuan, + 1.43% of the same period last year.

Among them, Q2 company realized operating income of 502 million yuan, year-on-year + 0.39%, month-on-month + 9.84%; net profit of return to mother 68 million yuan, year-on-year + 9.70%, month-on-month + 51.05%; net profit after deduction was 68 million yuan, + 10.76% year-on-year, month-on-month + 51.59%.

In the first half of 2023, the gross profit margin of activated carbon, sodium silicate and silica gel products decreased slightly compared with the same period last year: in the first half of 2023, the gross profit margin of activated carbon was 27.70%,-1.65pct, 9.32%,-0.84 pct, and 31.40%,-2.40%, respectively.

The financial expenses of Q2 company reached a new low level in a single quarter in 2023: the financial expenses of Q2 company in 2023 were-12 million yuan, down 3 million yuan from the same period last year and 7 million yuan from the previous month, creating a new low level of financial expenses in a single quarter.

With "technological innovation" as the core, actively promote the development and industrialization of new energy storage carbon materials: under the background of "double carbon", the company firmly promotes the development and industrialization of new energy storage materials such as super capacitive carbon and biomass hard carbon. As of 2022, the development of hard carbon, a new energy storage material for sodium ion batteries, is in the pilot stage.

In January 2023, the company completed the establishment registration of Yuanli New Energy carbon Materials (Nanping) Co., Ltd., a wholly-owned subsidiary, with a registered capital of 500 million yuan; in February, the subsidiary transferred the land, built factories, roads and other real estate of Fujian Nanping Sanyuan Bamboo Industry Co., Ltd., which is adjacent to the company at the price of 48.98 million yuan (excluding VAT); in April, the registration of change of ownership of related assets was completed.

The company issued a medium-and long-term shareholding plan for business partners to further enhance the investment value: on July 11, the company released a medium-and long-term shareholding plan for career partners. The plan is object-oriented for talents who have made important contributions to the overall performance and long-term development of the company. the implementation period is 10 years, and it will be rolled out every year since 2024, independent of each other. From the date of registration of the last stock in each issue to the stock ownership plan account: (1) the lock-up period for shares purchased by employees through self-raised cash is 12 months; (2) the lock-up period for shares purchased by employees through bonuses and other sources of funds is 60 months. This plan can strengthen internal incentives, further improve the employee compensation system, strengthen the long-term binding between the interests of the company and employees, and create long-term sustainable value for shareholders.

Profit forecast, valuation and rating: as a leading enterprise of wooden activated carbon, the production capacity of carbon and silicon products of the company continues to release, so we maintain the company's net profit of 2.56 yuan and 325 million yuan respectively from 2023 to 2024, and the net profit of the new company is 387 million yuan in 2025. the follow-up company further promotes the process of product development and industrialization of new energy storage carbon materials (such as hard carbon and super capacitive carbon). It is expected to fully benefit from the era of energy storage and new energy, maintaining the company's "buy" rating.

Risk tips: raw material prices have risen sharply; downstream demand has not performed as expected; and new capacity has fallen short of expectations.