The company released the 2023 mid-year report, the performance is in line with expectations. In the first half of 2023, the company realized revenue of 1.338 billion yuan, + 31.09% compared with the same period last year, and realized net profit of 250 million yuan, + 71.05% compared with the same period last year. In a single quarter, 23Q2 achieved revenue of 714 million yuan, year-on-year + 14.35%, month-on-quarter + 14.44%; single-quarter net profit 153 million yuan, year-on-year + 61.86%, month-on-quarter + 58.12%.
Profitability continues to rise month-on-month and the balance sheet is healthier. 23Q2's gross profit margin is 33.94%, month-on-month ratio + 2.80%; net profit rate is 21.46%, month-on-month ratio + 5.82%; period expense rate is 12.04%, month-on-month ratio-2.26pct, in which sales, management, finance and R & D expense rates are compared to-0.29pct,-1.58pct,-3.04pct and + 0.69pct, respectively. 23H1 company's asset-liability ratio is 14.39%; the company's 23H1 currency fund balance is 662 million yuan.
The advantage of core α is remarkable, and the growth momentum is good, so it is optimistic to accelerate the release of composite agent in the second half of the year. The company grasps the time window of the breakage of the supply chain of the four major additive manufacturers caused by the snowstorm in the United States, and at the same time completes the product upgrade with its own compound agent API certification, both of which accelerate the progress of head customer introduction. We believe that the month-on-month growth of monthly sales should not be overemphasized, ignoring the seasonality of lubricating oil additives and normal monthly sales fluctuations (delivery mode, revenue recognition, order rhythm, epidemic, etc.). 2023H1 is limited by the impact of some customers destocking, the company's production and sales volume has weakened. With the overall recovery of the industry and the elimination of inventory, sales of composite agents are expected to increase in the second half of the year. In the long run, the company has four advantages: (1) products: single-agent core category self-controllable + compound agent through high-level API certification; (2) obvious cost advantage brought by the integration of industry chain; (3) customer barriers:
Overseas head lubricating oil enterprises have introduced + domestic lubricating oil companies have a strong willingness to import substitution; (4) the advantage of scale is expected to continue to grow.
Profit forecast and investment advice. It is estimated that the return net profit of the company from 2023 to 2024 will be 803 million yuan, respectively. With reference to the comparable company's 2023 PE valuation, it will give the 2023 results 30 times the PE valuation level, corresponding to a reasonable value of 83.55 yuan per share, and maintain the "buy" rating.
Risk hint. Customer introduction is not as expected; new capacity project construction is less than expected risk; automobile industry policy risk; overseas market expansion risk.