Event: according to the company's semi-annual report of 2023, the operating income in the first half of the year was 1.66 billion yuan, down 5.08% from the same period last year; the net profit was 96.9924 million yuan, down 40.90% from the same period last year; and the non-net profit was 88.7674 million yuan, down 43.22% from the same period last year. The comments are as follows:
Sluggish market demand affects income, and the performance of testing business is better. In the first half of the year, due to macroeconomic fluctuations, market demand contraction and other adverse factors, the company's revenue / return net profit decreased by 5.08% respectively compared with the same period last year.
Of this total, the operating income of Q2 was 995 million yuan, down 3.70% from the same period last year; the net profit from home was 56.5709 million yuan, down 32.55% from the same period last year; and the non-net profit was 49.5171 million yuan, down 39.19% from the same period last year. In terms of products, the output of high performance superplasticizer / superplasticizer / functional materials in the first half of the year was 48.60, 247pm, 118,000 tons, respectively, down 7.41pm 12.38% compared with the same period last year; sales were 48.48pm, 2.47pm, 10900 tons, respectively, down 5.75pm 6.79max 8.09% from the same period last year The operating income was 0.53 million yuan respectively, with a year-on-year change of-10.66 prime 1.67 percent 4.91%. The business of the testing plate grew steadily in the first half of the year, with a net profit of 76.6205 million yuan, an increase of 8.13% over the same period last year.
Profitability has improved slightly, and cash flow is under pressure periodically. 1) the gross profit margin increased slightly, benefiting from the decline in the price of raw materials. In terms of price, the average selling price of the company's high-performance superplasticizer / superplasticizer / functional products changed respectively in the first half of the year compared with the same period last year. In terms of raw materials, there was a marked decline in the first half of the year, of which the average purchase price of ethylene oxide, formaldehyde and acrylic acid decreased by 18.11%, 10.73% and 55.57% respectively. The combined effect led to a year-on-year increase in gross profit margin of 0.05pct to 36.13%. 2) the net outflow of cash flow increased, and the expense rate increased compared with the same period last year.
The net cash flow generated by the company's operating activities in the first half of the year was-163 million yuan, down 4.63% from the same period last year, mainly due to the decrease in cash received from the sale of products and the provision of labor services. The net cash flow generated by investment / fund-raising activities is-230 RMB RMB 278 million respectively. In the first half of the year, the company's expense rate was 26.21%, an increase of 2.81pct over the same period last year. Among them, the sales / management (including R & D) / financial expense rates are 11.60, 13.25, 1.36%, respectively, with year-on-year changes + 2.14/+0.81/-0.14pct.
Jiangmen base has been officially put into production and is expected to grow in the future. In the first half of the year, the company officially put into production at the South China production base in Jiangmen, Guangdong Province. The base includes 100000 tons of polycarboxylic acid series high-performance superplasticizer mother liquor, 270000 tons of polycarboxylic acid series high-performance superplasticizer products, 60,000 tons of accelerator and 10,000 tons of rust inhibitor. At present, the company has 8 core bases, including Nanjing and Taizhou, Jiangsu, and has built multiple bases in more than 20 provinces, including Zhejiang, Guangdong, Shandong, etc., and the projects under construction are Lianyungang, Zhenjiang, Nanjing and Guangxi base projects. the national layout has been initially formed. In addition, the company plans to invest in the construction of 800000 tons of chemical functional new materials for construction in Xuwei New area of Lianyungang to support the continuous growth of the main business of superplasticizer and functional products.
Investment advice: performance is temporarily under pressure, production capacity is sufficient to help future growth, maintain overweight rating. It is estimated that the company's net profit from 2023 to 2025 will reach 2.8,3.6 and 420 million yuan respectively, with year-on-year changes of-2%, 26% and 18% respectively, corresponding to the PE valuation of 18, 14 and 12 times. The prosperity of the industry is expected to recover, the company's national layout, research and development, strong technical strength. As the company's bases have been put into production, production capacity is expected to expand rapidly.
The company's rising proportion of high-end products and smooth expansion of infrastructure projects are expected to offset the risk of declining demand downstream.
Risk tips: prices of raw materials such as ethylene oxide rise or exceed expectations; downstream concrete demand may be lower than expected; environmental protection policies may be repeated; industry competition intensifies; and the progress of accounts receivable recovery is lower than expected.