Main points of investment

Event: 2023H1 achieved a revenue of 628 million yuan, an increase of 22.28%, a net profit of 143 million yuan, an increase of 20.89%, and a net profit of 139 million yuan, an increase of 17.71%.

The performance of 2023H1 increased steadily, and the revenue of recycled materials and degradable materials increased by 72%. The gross profit margin of 2023H1 sales is 38.70%, with an increase of 2.28pct, and a net sales margin of 24.84% with an increase of 1.03pct.

From a business point of view, 1) New materials and synthetic materials: revenue of 373 million yuan, same increase of 3.95%, gross profit margin of 41.38%, same increase of 9.53pct. 2) recycled materials and degradable materials: income 217 million yuan, with an increase of 71.60%, gross profit margin of 28.13%, with minus 11.77pct, high revenue of recycled materials and degradable materials, further supporting the accelerated development trend of the industry. 3) Industrial AI integrated applications: revenue of 31 million yuan, same increase of 53.51%, gross profit margin of 74.60%, same minus 7.74pct.

The Asian food-grade recycled polyester model project has been successfully implemented, and the integrated application of industrial AI has been continuously promoted.

1) New materials and synthetic materials: successfully cut into the upstream industrial chain of PA66, the polyamide material process technology solution in the core technical service field has covered the whole industrial chain from the polymerization of caprolactam and nylon 66 to the spinning of nylon 6bin66. 2) recycled materials and biodegradable materials: the food-grade recycled rPET project signed by subsidiary Polymetrix and Japanese C-PET was successfully implemented and began to contribute its performance, which is the largest single investment recycled PET project in Asia, with a contract value of about 230 million yuan. The chemical recycled nylon material project signed by 2023H1 and Taihua New Materials subsidiary has begun to contribute to the performance and is expected to be delivered within 2023. 3) Industrial AI integrated applications: 2023H1 continues to promote the sales and delivery of agent solutions in the chemical fiber industry, with revenue in the first half of the year continuing the growth trend of more than 50% last year.

In technology-driven enterprises, the domestic breakthrough of adiponitrile will drive the release of polyamide 66 soon. The company has long been engaged in the research and development of key core technology and equipment in the field of fiber-forming polymer, with outstanding brand advantages and customer resources. With the localization of polyamide 6 and 66 raw materials and the marginal decline in cost, consumption upgrading led to the rapid development of high-end textile demand and the automotive industry, polyamide 6x66 continued to usher in steady growth. Breaking the technical monopoly of adipic nitrile in 2022, polyamide 66 will usher in the rapid expansion of the industry.

Polyester bottle chip recycling is a global leader and is expected to replicate the advantages and share of the original field. Polymetrix is a global leader in solid phase polymerization (SSP) technology, with an international market share of 90% in the field of primary polyester (vPET). Its products meet the safety requirements of food-grade packaging materials of enterprises such as Coca-Cola Company, Nestle and Danone, and achieve ultra-clean technology in the field of recycled polyester (rPET). The closed-loop cycle of polyester reuse is really realized, and the global market share is up to 40%. The company is expected to replicate the primary market share in the recycled polyester industry. To achieve the rapid expansion of recycled plates.

Profit forecast and investment rating: with the upgrading of downstream demand for nylon, the acceleration of the recycling industry, the accumulation of orders on hand, the performance will be released steadily. We maintain the 2023-2025 homing net profit forecast of 415pm 532 million yuan, corresponding to 17, 13 and 10 times of PE, maintaining the "buy" rating.

Risk tips: orders are not as expected, R & D risks, industry competition intensifies.