[investment points]
The company's 2023H1 results are under pressure, but there are signs of stabilization on a month-on-month basis. 2023H1 realized operating income of 1.736 billion, down 32.4% from the same period last year; realized net profit of 130 million, down 62.3% from the same period last year; and realized net profit of 126 million yuan, down 60.5% from the same period last year.
On a quarterly basis, 2023Q1 and Q2 achieved income of 778 million yuan and 959 million yuan respectively, down 34.1% and 31.0% respectively from the same period last year; net profit of 20 million yuan and 110 million yuan, down 89.7% and 27.3% respectively from the same period last year; and net profit of 22 million yuan and 104 million yuan, down 87.7% and 26.9% respectively. The decline in income and profit in the first half of the year is mainly due to the decline in the prices of raw materials such as sulfuric acid and chloride, the weakening support for the price of fluorine refrigerants, and the decline in the price of refrigerant products of the company. Although the company's first-half results are under pressure, compared with the previous month, the company's 2023Q2 revenue and homed net profit improved significantly, of which income increased by 23.3% and homed net profit increased by 449.4%, showing signs of stabilization.
The third generation refrigerant is the core business of the company. HFCs refrigerant is the core business of the company. At present, HFCs refrigerants (the third generation refrigerants) mainly include HFC-134a, HFC-125, HFC-32, HFC-143a and other refrigerants, as well as R410a, R404A, R407c and R507 mixed refrigerants. The company currently has a production capacity of 65000 tons of HFC-134a, 52000 tons of HFC-125, 40, 000 tons of HFC-32 and 10, 000 tons of HFC-143a. The company also has HCFCs refrigerant products, including HCFC-22 and HCFC-142b. The company's 2023 HCFC-22 quota for refrigerant production is 9500 tons (5.3% of the national quota), and the HCFC-142b quota is 1700 tons (18.2% of the national quota). In addition, the company also has a production capacity of 35600 tons of fluorine blowing agent HCFC-141b, corresponding to a production quota of 14500 tons in 2023, accounting for 68.9 percent of the national quota. In order to meet the demand of raw materials for refrigerants and other chemicals, the company now has an anhydrous hydrofluoric acid production capacity of 131000 tons and sells to the outside world on the premise of self-use. 2023H1 achieved sales of 62500 tons of refrigerant products, down 13.8% from the same period last year, 4500 tons of foaming agent products, down 47.4% from the same period last year, and anhydrous hydrofluoric acid sales of 34700 tons, down 9.7% from the same period last year.
The company actively distributes high value-added fluorine chemical products, and its growth is expected. In addition, the company is also actively arranging high value-added products such as lithium hexafluorophosphate, polyperfluoroethylene propylene, polyvinylidene fluoride and lithium difluorosulfonimide (LiFSI). Through the downstream extension of the fluorine industry chain, the company's product structure is expected to be enriched, and the anti-risk ability and profitability are expected to be further enhanced.
[investment advice]
According to the company's semi-annual report of 2023 and the supply and demand situation of the refrigerant industry, we estimate that the company's operating income of 2023 PE 2024 will be 41.33 million, 48.13 million and 5.553 billion respectively, and the estimated net profit of homing will be 4.10 million, 677 and 913 million, respectively; the EPS will be 0.67, 1.11 and 1.50 yuan, respectively, and the company will be rated as "overweight" corresponding to PE of 44-26-20.
[risk Tip]
The third generation refrigerant products are not as prosperous as expected.
Downstream demand of refrigerant is lower than expected.
The release of new production capacity is not as expected.