Event: according to the company's quarterly report for 2023, 2023Q3 realized operating income of 963 million yuan, up 10.05% from the same period last year and 12.83% from the same period last year. The net profit attributed to the parent company was 50 million yuan, down 66.51% from the same period last year, and 58.69% from the previous year. The operating income of 2023Q1UV Q3 was 2.627 billion yuan, down 2.6% from the same period last year, and the net profit attributed to the parent company was 259 million yuan, down 40.87%.
The price of raw materials is rising, and the performance is under short-term pressure. 2023Q3, the main raw material of the company's anti-coke agent, cyclohexane, aniline, the main raw material of accelerant, and liquid sulfur, the main raw material of insoluble sulfur, have all increased in varying degrees. According to Baichuan Yingfu, the average 2023Q3 prices of cyclohexane, aniline and liquid sulfur are 7363 yuan / ton, 11421 yuan / ton and 689 yuan / ton respectively, up 4.5%, 2.3% and 15.4% respectively.
Cost pressure reduced the company's profitability. The company's gross profit margin in the third quarter was 18.4%, down 7.71pct, 8.67pct, 5.19%, 11.85pct and 8.98pct.
Rubber auxiliaries industry boom, long single pricing adjustment lags behind, 2023Q4 performance is expected to rise.
Rubber auxiliaries are used to improve the processability of rubber compound, and tire is the most important downstream demand. Benefiting from the decline in sea freight rates and the increase in export orders, 2023Q2, China's tire production and new inflatable rubber tire exports increased by 16.8% and 15.9% respectively month-on-month, while tire production and export volume maintained a slight upward trend compared with the previous month. Due to the lag of the company's long order price adjustment, it is expected that the boost in downstream demand will drive the price of the company's main products up from the fourth quarter. The company is the global leader of anti-coke agent CTP, is the only domestic enterprise with continuous production capacity, at the same time, accelerant products almost cover the mainstream product system of the accelerant market. In the process of repairing the industry boom, we are optimistic about the performance flexibility of the company's main products.
More new products bloom, and the company has considerable room for growth. The company's new production capacity includes 10,000 tons of resin project, 65000 tons of silane coupling agent project, 10 thousand tons of Derek rubber anti-coke agent CTP project, 40 thousand tons of trichlorosilicon co-production of 6500 tons of silicon tetrachloride, 15000 tons of organic peroxides, electrolyte VC and so on. In addition to the continued development in the field of rubber auxiliaries, the company also continues to make efforts in the fields of plastics, resins and coatings, and health, and develops in depth to the upper reaches of the industrial chain. The introduction of new production capacity is expected to further thicken the company's profits and open up room for growth.
Maintain the "highly recommended" investment rating. Considering the pressure of the rising price of raw materials on the company's performance, we estimate that the company's income from 2023 to 2025 will be 3.388 billion yuan, 4.794 billion yuan and 5.728 billion yuan respectively, the net profit will be 381 million yuan, 527 million yuan and 655 million yuan respectively, and the EPS will be 0.94 yuan, 1.30 yuan and 1.62 yuan respectively. The current share price is 9.3x, 6.7x and 5.4x respectively corresponding to PE, maintaining the "highly recommended" investment rating.
Risk tips: lower-than-expected demand, raw material price fluctuations, exchange rate fluctuations, new production capacity is not as expected, technical route update iteration.