Event description. On August 15, 2023, the company released its semi-annual report of 2023, with revenue of 960 million yuan in the first half of the year, an increase of-3.11% over the same period last year, a net profit of 114 million yuan, an increase of 0.44%, and a net profit of 113 million yuan, an increase of 1.43% over the same period last year.

Q2 split. Revenue and net profit: the company's 2023Q2 revenue was 502 million yuan, an increase of 0.39%, a ring increase of 9.84%, a net profit of 68 million yuan, a 9.70% increase, a ring increase of 51.05%, and a net profit of 68 million yuan, 10.76% and 51.59% respectively. Gross profit margin: 2023Q2 gross profit margin is 23.00%, with minus 1.23pct, ring increasing 1.35pcts. Net interest rate: 2023Q2 net interest rate is 15.86%, the same increase 1.99pcts, ring increase 4.27pcts. Expense rate: the expense rate during the 2023Q2 period of the company was 9.33%, which decreased 0.15pcts compared with the same period last year, in which the rates of sales, management, R & D and financial expenses were 2.07%, 6.01%, 3.57% and-2.32%, respectively.

The leading position of activated carbon is stable, and the production capacity of new categories is constantly improving. 2023H1, the company's activated carbon products achieve revenue of 595 million yuan, accounting for 62.02% of revenue. The gross profit margin of activated carbon was 27.7%, down 1.65% from the same period last year, mainly due to the rise in the price of wooden raw materials and the weak recovery of the downstream market. At present, the production capacity of wooden activated carbon has exceeded 120000 tons, and the capacity construction is in the stage of continuous expansion. In addition, the company focuses on the field of environmental protection and actively implements the expansion of granular carbon production capacity. With the continuous release of production capacity, the company gradually turns its technological and cost advantages into economies of scale to ensure profitability.

The annual output of sodium silicate is in the forefront. Yuanhe Chemical, a subsidiary of the company, now has an annual production capacity of 290000 tons of sodium silicate, ranking in the forefront of the industry. the sodium silicate produced by Yuanhe Chemical Co., Ltd., a subsidiary of the company, now has an annual production capacity of 290000 tons of sodium silicate, ranking in the forefront of the industry. the sodium silicate products are extended downstream to the production of silica gel, connecting various business plates. The company has completed the first phase and the second phase of 80,000 tons of sodium silicate production line, rich production capacity.

The industrialization of new energy storage carbon materials has been accelerated. The company seizes the development opportunity of the new energy storage field, gradually develops new categories such as super capacitive carbon, and promotes large-scale industrialization. In terms of progress, biomass hard carbon is in the pilot stage, and the company is carrying out the preliminary work of expanding production. Yuanli New Energy carbon Materials (Nanping) Co., Ltd., a wholly owned subsidiary of the company, has also been transferred to the land and other real estate of Fujian Nanping Sanyuan Bamboo Industry Co., Ltd. adjacent to the company to speed up the pace of industrialization.

Investment suggestion: we expect the company's revenue from 2023 to 2025 to be 22.43,30.43 and 5.113 billion yuan respectively, with corresponding growth rates of 15.0%, 35.6% and 68.0%, respectively. The homing net profit is 2.55,3.74 and 683 million yuan respectively, and the corresponding growth rate is 13.8%, 46.4% and 82.7% respectively. Based on the closing price on August 16, the PE in 2023-2025 is 24X, 17X, 9X. Considering the accelerated process of production capacity, the industrialization process of new energy storage materials is fast, and the profit advantage is obvious, the "recommended" rating is maintained.

Risk hint: raw material prices have risen sharply, downstream demand is lower than expected, and capacity expansion is not as expected.