Brief comment on performance
On August 29, 2023, the company disclosed its semi-annual report that the operating income in the first half of 2023 was 1.26 billion yuan, down 9.9% from the same period last year, and the net profit from the home was 140 million yuan, down 28.2% from the same period last year. Among them, the operating income in the second quarter was 595 million yuan, down 13% from the same period last year and 10% from the same period last year. The net profit from the home was 59.6 million yuan, down 35% from the same period last year and 24% from the previous year.
Business analysis
The price of traditional business products has come down, and the performance is under pressure in stages. The downstream of the company's core product fat is mainly the pesticide and pharmaceutical industry. Although sales increased slightly but the unit price decreased due to the sluggish demand downstream in the first half of the year, the prices of organic solvent series products also fluctuated downwards. in the first half of the year, the average sales prices of fatty amines, organic solvents, flavors and fragrances were 12274, 7782 and 35168 yuan / ton respectively, with year-on-year changes of-15.3%,-4.1% and 0.3%, respectively. As product prices fell, the company's profitability began to come under pressure, with the overall gross profit margin falling from 24.8% in the first quarter to 22.7% in the second quarter.
Join hands with Haichuang cycle to sign a framework agreement on renewable energy cooperation, lithium recycling business continues to extend. In the past, the related business of the lithium electricity industry involved in the company is mainly extraction lithium extraction services, which has a certain degree of cooperation with lithium recovery in terms of process technology. In recent years, the overall recovery rate of lithium has been improved by constantly optimizing the extraction technology of lithium. Rely on technological advantages to quickly seize the first opportunity. In the field of lithium extraction from salt lake, the company signed an industrial test project for efficient separation of lithium mother liquor (extraction method) with Salt Lake shares and Lanke Lithium Industry, which was successfully put into production at the beginning of July. In the field of lithium recycling, the company reached a cooperation agreement with Yaoning Technology, a subsidiary of Geely, to jointly fund the construction of a phase of 10,000 tons / year waste lithium recycling production line, and the company signed a product sales contract with Greenmei. The extractant was successfully applied to the battery recycling production line of Grimm. In addition, on August 9, the company successfully signed a framework agreement on renewable energy cooperation with Anhui Haichuang Recycling Technology Co., Ltd., owned by China Conch Venture of China, and defined the project plan for the recycling of waste lithium batteries. through multi-party cooperation, the company is expected to achieve rapid growth in the field of lithium battery recycling.
Earnings forecast, valuation and rating
The company is a leading domestic low-carbon aliphatic amine enterprise, and the flavor and flavor business is bound to overseas giants. Although the main business is under short-term pressure, the overall stability is relatively good, and the long-term growth of lithium recovery business plate is expected. We expect the company's 2023-2025 net profit to be 304 million yuan, 384 million yuan and 446 million yuan, respectively, and the current market capitalization corresponds to a PE valuation of 20.02, 15.81, 13.63 times, maintaining a "buy" rating.
Risk hint
The release of new production capacity is lower than expected; the price of raw materials fluctuates sharply; the extraction order for lithium extraction is not as expected; the progress of lithium recycling project is not as expected; the RMB exchange rate fluctuates.