According to the company's semi-annual report of 2023, the company's revenue in the first half of the year was 1.338 billion yuan, an increase of 31.09% over the same period last year, and the net profit was 250 million yuan, an increase of 71.05% over the same period last year. The net profit of non-parent was 232 million yuan, an increase of 110.17% over the same period last year. Of this total, Q2 realized revenue of 714 million yuan, an increase of 14.35 percent over the same period last year, an increase of 14.44 percent over the previous year, and a net profit of 153 million yuan, an increase of 61.86 percent, an increase of 58.12 percent over the same period last year, deducting 144 million yuan of non-return net profit, an increase of 63.72 percent over the same period last year and 63.04 percent over the previous year.
Mainly due to the rapid growth of the production and marketing scale of the company's composite agent, the performance is in line with expectations.
The transformation of the compound agent has been very effective, and Q2 has made a profit compared to the previous repair. In the first half of the year, the company continued to obtain lower dosage and more energy-saving bench test reports issued by third-party authoritative testing institutions, further enhanced the core competitiveness of the company's products, and made a breakthrough in the access of core customers, and the sales of composite agents increased rapidly. The proportion of income reached 64.80%, and the transformation of the compound agent was very effective. On the raw material side, according to Baichuan Yingfu data, the average price of WTI crude oil in the second quarter was 73.60 US dollars per barrel, down 2.76% from the previous quarter. The decline in crude oil prices led to a decline in the cost of raw materials such as base oil, and the company's profitability was repaired month on quarter in the second quarter. The company's sales gross profit margin was 33.94% in the second quarter, an increase in 2.8pct compared with the first quarter.
We will actively promote the construction of new production capacity and seize the opportunity to rebuild the international supply chain system against the background of the rising trend of globalization. At present, the global lubricating oil additive market has formed a competitive pattern dominated by Lubrizol, Yinglian, Chevron Corp Orennay and Yafton, with a total market share of about 85%. Under the trend of anti-globalization, the impact of geopolitical conflicts is superimposed. The international lubricating oil additive supply chain is facing reconstruction and domestic import substitution is accelerated. On the one hand, the company continues to increase its R & D investment, investing 135 million yuan to build a new R & D center, which will further enhance the company's R & D strength after completion. On the other hand, the company continues to promote the construction of new production capacity. Up to now, the company has a single-agent production capacity of 200000 tons, and the annual output of 140000 tons of lubricating oil additive series is expected to be put into production by the end of 2023. The annual output of 460000 tons of lubricating oil additive series is expected to be put into production by the end of 2025. With the new production capacity gradually completed and put into production, the company has broad space for future development, and the global market share is expected to increase gradually.
Maintain earnings forecasts and maintain "overweight" ratings. The transformation effect of the company's compound agent is remarkable, and the Xinxiang base is expected to further improve the company's global market penetration after it is put into production. It is estimated that the net profit from 2023 to 2025 will be 7.81 billion yuan, respectively, and the corresponding PE will be 18X/13X/11X, maintaining the "overweight" rating.
Risk tips: capacity digestion is not as expected; demand decline risk; raw material prices rise.