Summary of events: in the first half of 2023, the company achieved revenue of 283 million yuan, a decrease of 43% over the same period last year, a net profit of 16.86 million yuan, a decrease of 83% over the same period last year, and a deduction of non-return net profit of-5.18 million yuan, a decrease of 105% over the same period last year. 2023Q2, the company realized revenue of 158 million yuan, a decrease of 35% compared with the same period last year, an increase of 27% compared with the same period last year; a net profit of 15.06 million yuan, a decrease of 74%, and an increase of 737%; and a net profit of 4.53 million yuan, a decrease of 92% over the same period last year and an increase of 147% over the previous year.
Comments: the month-on-month improvement trend is clear, and the new business is progressing smoothly
Quantity: the company's product sales continue to climb. Company 2023H1 company product shipments continue to pick up, 2023Q1 total shipments of about 185tons, month-on-month increase of 77% compared to 2022Q4 2023Q2 total shipments of about 274tons, month-on-month increase of 48% over 2023Q1. In terms of nickel powder, 2023Q1 shipped about 173t. With reference to the growth rate of 48% of the overall shipment, we estimate that 2023Q2 nickel powder shipped about 255t; in terms of wallet-clad copper powder, the cumulative shipment in the first half of 2023 has reached more than 3 tons, and it is expected to continue to contribute to the performance increase in the second half of the year.
Price: the company's overall profit is expected to continue to improve. The company's 2023Q2 gross profit margin of 12.14%, a month-on-month decline of 6.22pct, is mainly due to the fact that the company's high-priced inventory has not been digested, while the nickel price continues to decline to magnify the cost-side impact (the average price of 2023Q1 Jinchuan nickel is about 2076 yuan / ton, and the average price of 2023Q2 Jinchuan nickel is about 18.16 million yuan / ton, down 26,000 yuan / ton from the previous month). Secondly, the capacity utilization rate of the company's nickel powder 2023Q1 is 28.02%. Insufficient production capacity leads to an increase in fixed production costs such as labor and manufacturing costs per unit of product, further compressing product gross profit; at the same time, the recovery of 2023Q2 sales in terms of product structure is mainly low gross margin products, and the proportion of low gross margin product structure is a slight drag on gross profit margin. With the company's capacity utilization continues to climb, high-priced inventory continues to digest, stack high gross margin products are expected to gradually increase, the company's profitability is expected to continue to improve.
Core focus: the company's main nickel powder industry gradually recovers with the downstream MLCC industry, and shipments are expected to continue to grow. At the same time, thanks to grading process optimization and technological innovation to improve the quality of small particle size finished nickel powder, the company's small particle size nickel powder new products and car gauge grade nickel powder products are also expected to gradually release, and profit disturbance factors are expected to gradually digest to achieve both revenue and profit growth. Silver-clad copper powder 2023H1 has achieved cumulative shipments of more than 3 tons, and shipments are expected to further increase in the second half of the year, contributing to the increment of performance; the pilot production line project of nano-silicon powder is expected to be completed by the end of 2023, and the industrialization process is expected to accelerate the opening of new growth space; major shareholders fixed increase in full subscription, demonstrating confidence in the future development of the company.
Investment advice: we believe that the electronics industry demand recovery trend is clear throughout the year, the company's nickel powder business is expected to continue to improve, superimposed 23-year wallet copper powder shipments rapidly increase, the annual performance is expected to show a continuous improvement trend. The industrialization process of nano-silicon powder business is also expected to accelerate, opening up another growth space for the company. The company relies on core technological advantages to build a solid moat, excellent competition pattern, "one body and two wings" layout, growth space can be expected, we adjust the 2023-2025 net profit homed to 0.95x165x309 million, corresponding to the closing price of August 18, 2023 PE is 86-49-26 times, maintaining the "recommended" rating.
Risk tips: downstream demand is lower than expected, raw material prices fluctuate sharply, and the progress of new products is not as expected.