This report is read as follows:
The company's Q3 month-on-month growth in 2023 is in line with market expectations, the export of lubricating oil additives is rising steadily, the company's growth trend remains unchanged, and the "overweight" rating is maintained.
Main points of investment:
Maintain the "overweight" rating. As the lubricating oil market is in a state of weak recovery, the EPS for 23-25 years is 2.41max 2.99max 3.65 yuan, respectively (the original 2.58max 3.28max 3.95 yuan). Due to the large market space of lubricating oil additives and high barriers to composite products, the company's permeability increased rapidly, but the recovery speed was relatively slow, and the target price was reduced to 60.30 yuan (corresponding to 25 times of PE in 2023).
23Q3 improved month-on-month, in line with market expectations. From January to September 2023, the company realized revenue of 2.152 billion yuan, year-on-year + 5.42%, and net profit of 452 million yuan, + 24.01%, of which 23Q3 realized revenue of 814 million yuan,-20.25% year-on-year, + 14.03%, and net profit of 201 million yuan, 7.60% and + 31.24%, respectively. In terms of profitability, 23Q3's gross profit margin / net profit margin is 37.47% / 24.75% respectively, month-on-month + 3.52/+3.29pct. We believe that the company's month-on-month growth is mainly due to the rapid growth of composite agent sales and the improvement of profitability.
China's export of lubricating oil additives continues to grow. According to customs data, from January to September 23, China exported 161800 tons of lubricating oil additives, + 18.66% year-on-year, and the average export price was 23054 yuan / ton, + 6.79% year-on-year, of which 23Q3 China exported 60500 tons of lubricating oil additives,-5.28% year-on-year, + 23.10% month-on-month, and the average price was 23009 yuan / ton,-4.98% year-on-year, + 1.45%.
The export of lubricating oil additives in China continues to grow, and the general trend of growth remains unchanged.
The company's production capacity has expanded steadily and API certification has been obtained one after another. The company has a single agent production capacity of more than 200000 tons, belonging to the first camp in China, and is currently under construction with a production capacity of 550000 tons. In addition, the company has passed the APISP grade compound agent certification, and diesel API CK has partially passed the test. The new production capacity certification will help the company to gain more share in the additive market and accelerate global expansion.
Risk hint: market development is not as expected and raw material prices are rising.