Event: Kaili Xincai released its financial report for the first half of 2023, with operating income of 970 million yuan in the first half of the year, + 14.5% year-on-year, and net profit of 91.136 million yuan,-28.9%, of which Q2 realized operating income of 475 million yuan, year-on-year-10.9% and month-on-month profit of-3.9%. Achieve net profit of 49.88 million yuan,-31.3%, + 20.9%. The first half gross profit margin is 15.2%, year-on-year-7.6PCT, net sales margin is 9.4%, year-on-year-5.7PCT.
The growth of income, the decrease of profit and the decline of gross profit margin are the main reasons.
The company's 2023H1 realized operating income of 970 million yuan and net profit of 91 million yuan, which was 14.5% higher than that of 22H1 and-28.9% compared with the same period last year. The gross profit margin and net profit rate of 23H1 decreased significantly. The ratio of gross profit margin to net profit margin of 23H1 was 15.2% and 9.4%, which decreased 7.6PCT and 5.7PCT compared with 22.9% and 15.1% of 22H1, respectively. The decline in gross profit margin is the main reason for the increase in income and the decline in profits.
From a quarterly point of view, the income of Q1/Q2 in 23 years was 495 million yuan and 475 million yuan respectively, and the net profit was 0.41 yuan and 50 million yuan respectively, of which Q2 income and net profit decreased year-on-year,-10.9% and-31.3%, respectively. In terms of gross profit margin and net profit margin, Q2 gross profit margin is 15.8% and net profit rate is 10.5%. Although it has dropped significantly compared with the same period last year, it is + 1.1PCT and + 2.2PCT respectively.
The downward price of precious metals affects the gross profit margin of sales business, and the growth of technical services reflects the diversified development of Kaili new materials business model. Carey new materials business model can be divided into three categories: precious metal catalyst sales / processing / technical services. The three types of 23H1 business models account for 87.13%, 7.24%, 2.11%, respectively. This also reflects that as a precious metal catalyst R & D and sales platform companies, to product sales plus technical services integrated companies to take an important step.
Although the sales revenue was higher than that of 22H1, the gross profit margin decreased significantly, while the rapid decline in precious metal prices, the growth of the company's turnover materials, and the accounting requirements of sales business cost accounting caused this change: according to the company's private inquiry letter, the company's H1 sales gross profit margin changed by-9.98% in 2023, of which the change in sales unit price was-0.85%. The impact of unit cost changes on gross profit margin is-9.13%, which is the main reason for the decline of gross profit margin.
The basic chemical industry increased rapidly, PVC continued to cash in in the first half of the year, and the business developed smoothly according to the company's semi-annual report. According to the company's semi-annual report, 2023H1's operating income increased by 14.49% over the same period last year, of which the basic chemical industry, new chemical materials and pesticides increased by 129.13%, 17.28% and 22.12% respectively over the same period last year. As of the end of July, the outstanding contract balance was 260t, and PVC sales in the first half of the year were about 130t, which was the main growth point of revenue growth in the basic chemical sector.
Profit Forecast: due to the volatility of precious metals prices affecting the first half of the year, we downgrade our 2023-2025 net profit forecast to 2.49max 296x339 million (previously 319x396pm 464 million), maintaining the "Buy" rating.
Risk tips: the price of precious metals is falling rapidly; the fixed increase issue is not successful; the construction of fund-raising projects is not smooth.