Event description
The company released its semi-annual report in 2023, with revenue of 1.26 billion yuan (year-on-year), net profit of 140 million yuan (year-on-year) and non-net profit of 130 million yuan (- 24.0%). Among them, Q2 realized revenue of 600 million yuan (year-on-year-12.7%, month-on-quarter-10.1%), attributable net profit of 60 million yuan (year-on-year-35.1%, month-on-month-23.9%), and realized attribution deduction of non-net profit of 60 million yuan (year-on-year-26.5%, month-on-month-24.9%).
Event comment
At the bottom of the price of 2023Q2's main products in a single quarter, 2023Q3 has risen. The company's operating income in the first half of 2023 was-9.9%, mainly due to the decline in product sales prices. The average sales prices of aliphatic amines, organic solvents and synthetic spices of 2023H1 were 12274, 7782 and 35168 yuan per ton, respectively, with year-on-year changes of-15.3%,-4.1% and + 0.3%, respectively. The average sales price of aliphatic amines, organic solvents and synthetic spices of 2023Q2 in a single quarter was 11549, 7366 and 33995 yuan / ton, with month-on-month changes of-10.3%,-11.3% and-6.3% respectively. According to Baichuan Yingfu, 2023Q3 (as of August 30, 2023), the average market price of isopropylamine (East China), triethylamine and isopropanol is 12901, 16550 and 7460 yuan / ton, which is + 17.9%, + 13.8% and + 8.1% compared with 2023Q2. Among them, isopropylamine (East China) mainly benefited from the upside of glyphosate, triethylamine also benefited from the uptrend of glyphosate and VC demand, and isopropanol benefited from the rising price of raw material acetone. Due to fluctuations in the prices of major raw materials, 2023H1's operating costs decreased by 8.7% compared with the same period last year, and the prices of acetone, alcohol, n-propanol, n-butanol and liquid ammonia were-2.6%,-6.6%,-2.9%,-27.0% and-17.3% respectively. Product prices fell, with 2023Q2's gross profit margin of 22.7% (year-on-year-1.0%, month-on-month-2.1%) and net sales margin of 11.6% (year-on-year-3.7%, month-on-month-1.2%). The period expense rate of 2023Q2 is 10.2% (year-on-year + 1.9%, month-on-month + 0.8%).
The company is making steady progress in the construction project. The company has a clear development goal and draws a blueprint for the construction of the project. Major projects such as the oceanic base pilot test, 6000 tons of flame retardant expansion project, 100000 tons of isopropylamine intelligent transformation project, Ningxia Xinhua spice project, Ningxia Xinhua phosphine new materials project and other major projects are carried out in an orderly manner in accordance with the plan.
The salt lake lithium extraction team of the research institute of the company has made a great breakthrough in the field of lithium resource extraction and recovery. In the field of lithium extraction from salt lake, the company has signed an industrial test project with Salt Lake shares and Lanke Lithium Industry for efficient separation of lithium mother liquor (extraction method). The project has been successfully put into production at the beginning of July and has been tested successfully and made qualified products. In the field of lithium battery recycling, the company reached an agreement with Jiangsu Yaoning New Energy Co., Ltd., and Shanghai Tianqian Consulting Management Partnership on matters related to the establishment of a joint venture company in Jiande City to carry out lithium battery recycling. Xinhua shares hold 51% of the joint venture company. According to the agreement, the joint venture company will invest in the construction of a 10,000 ton / year waste lithium recycling production line, with a construction period from July 2023 to July 2024. After the first phase of the project is completed, if the project company is unable to meet the lithium battery treatment needs of Jiangsu Yaoning and Tianqian, it will carry out later construction: phase II: the recycling capacity of waste lithium batteries in the project company will be increased by 40,000 tons / year. Phase III: the recycling capacity of waste lithium batteries in the project company increased by 50,000 tons per year. The second and third phases will be completed before December 2026. The company signed a product sales contract with Green Mei, and the extractant was successfully applied to the battery recycling production line of Green Mei Company.
The company's original main business is aliphatic amines and organic solvents. With the gradual launch of the planned production capacity of the company's flavors and fragrances, and the further expansion of channels for lithium extraction and lithium electricity recovery in the salt lake, the company has a broad space for growth. The company is expected to maintain a "buy" rating with a net profit of 3.0,4.50 and 600 million yuan respectively from 2023 to 2025.
Risk hint
1. The progress of the project is not as expected.
2. The downstream demand is lower than expected.