Event: Chuanheng Co., Ltd. released its semi-annual report for 2023, with operating income of 1.88 billion yuan during the reporting period, an increase of 18.49% over the same period last year; net profit of 273 million yuan, down 26.23%; and net profit of 274 million yuan, down 26.27% from the same period last year. Based on the latest total share capital, the basic earnings per share was 0.55 yuan, down 26.67% from the same period last year.
Judging from the single quarter, the operating income of 2023Q2 in the single quarter was 882 million yuan, down 9.87% from the same period last year and 11.70% from the previous year; the net profit from home was 115 million yuan, down 56.86% from the same period last year and 27.39% from the previous quarter; and the net profit from non-return was 117 million yuan, down 56.64% from the same period last year and 25.79% from the previous year.
Maintain the investment rating of "overweight". In the first half of 2023, the sales of new products such as phosphoric acid and ferric phosphate promoted the growth of the company's operating revenue. However, the price decline of the company's main industrial monoammonium phosphate, calcium dihydrogen phosphate and other phosphorus chemical products led to a decline in the company's profit level. At the same time, the company's expenses have increased, and the company's 23H1 performance has declined. Chuanheng Co., Ltd. is a technology leader in the domestic phosphorus chemical industry, and the company ranks first in the market share of fire grade monoammonium phosphate and calcium dihydrogen phosphate in the domestic industry. The company has upstream phosphate rock resources. at present, the annual production capacity of phosphate ore is 3 million tons, which is basically self-sufficient. The current product line expands downstream to purify phosphoric acid, iron phosphate, lithium iron phosphate and lithium hexafluorophosphate and other products, cutting into the new energy sector. The company is building and planning a large number of projects, and the introduction of new energy related companies for technical cooperation. With the gradual landing of the company's planned projects, the company has sufficient growth and its future performance can be expected. Overall, the company's main product business is stable and good, while the products extend to the new energy sector, equipped with phosphorus resources to further strengthen the company's competitive advantage in the iron phosphate industry. We adjust the company's profit forecast and estimate that the EPS from 2023 to 2025 will be 1.42,1.90,2.47 yuan respectively, maintaining the "overweight" rating.
Risk tips: the risk of low product prices, the risk that new projects are not put into production as expected, and the risk of tightening environmental protection policies.