Event description

According to Haiyou New Materials' annual report of 2023, 2023H1 achieved 2.4 billion yuan in revenue, down 15% from the same period last year; the net profit returned to its mother was-34 million yuan; of this total, the income of 2023Q2 was 1.05 billion yuan, down 34% from the same period last year; and the net profit returned to its mother was-57 million yuan.

Event comment

From the perspective of volume-profit separation, we expect the company's 2023H1 to maintain good film sales, in which Q2 may be lower than Q1, mainly due to the decline in the price of particles and film in June, the company takes the cost into account and takes the initiative to control production and marketing.

We expect the company's Q2 film flat net profit to be in the historical position. The reason for the pressure on film profits is mainly due to the continuous growth of industry production capacity since the middle of last year, the expected deterioration of the competition pattern, the control of leading enterprises in order to control the healthy development of the industry, and the price strategy to remain cautious.

In other data, the cost of the company during the Q2 period was 70 million, which decreased slightly from the previous month, because the income was also lower than the previous month, and the expense rate during the period was 6.7%, which increased slightly. The final inventory of Q2 was 1.14 billion, down 16% from the previous month, reflecting the elimination of inventory. The net operating cash flow of Q2 is-110 million, although it has not yet become a regular employee, but it has improved significantly compared with previous quarters.

Looking forward to the follow-up, we believe that the Q2 company has shown the bottom of the volume profit, and the follow-up volume profit is expected to continue to repair. The company is basically full production in August and is expected to be flat in September. Q3 shipments are expected to double the month-on-month growth. In terms of price, the price of plastic film has increased in August, and the profit level of the company has been improved compared with Q2. Under the background of recent particle adjustment, plastic film in September is also willing to increase prices, and profits are expected to be further repaired. At the same time, the company began to layout the automotive intelligent glass film material business, which is expected to bring new performance growth points in the future.

We expect the company to achieve profits of 200 million yuan and 400 million yuan respectively from 2023 to 2024, corresponding to 38 and 15 times of PE.

Risk hint

1. The competition pattern is deteriorating.

2. Photovoltaic installation is not as expected.