The company announced the third quarterly report of 2023, the performance is basically in line with market expectations. 2023Q1-3 achieved operating income of 2.479 billion yuan, an increase of 3.8% over the same period last year, a net profit of 293 million yuan, an increase of 17.2% over the same period last year, and a non-return net profit of 281 million yuan, an increase of 18.5%. 2023Q3 realized income of 874 million yuan, an increase of 2.1% over the same period last year, and a net profit of 116 million yuan, an increase of 13.2% over the same period last year, deducting 111 million yuan of non-return net profit, an increase of 11.5% over the same period last year.
The revenue side is growing steadily, the downstream demand is resilient, and the contribution of overseas markets is increasing. The income end grew steadily, and under the influence of the price adjustment mechanism triggered by the rapid decline of raw materials, the supply price of 23Q1-3 to the lower reaches decreased, the sales volume still maintained steady growth, and the industry pattern continued to optimize. 1) downstream food, daily chemical, medicine and other mass consumer goods industries are resilient, the company's color printing business cooperates closely with high-quality customers, and the recovery of demand brings stable growth of orders. (2) 23H1 film business has declined, mainly due to medical breathable film and consumer electronic products protective film affected by downstream demand has declined, 23Q3 with the new production capacity and domestic supply, export balance, film business to restore growth, of which 33000 tons of new BOPE film project, is expected to comply with a single material easy to recover recyclable material development trend, continue to open the downstream market demand. 3) continue to go deep into the industrial chain of multinational corporations, contribute more to overseas markets, and continue to break into the global procurement supply chain of multinational corporations such as Procter & Gamble Co, Colgate and PepsiCo by virtue of the competitiveness of product quality and price.
On the profit side, the downward cost of raw materials drives the gross profit margin to increase, and the expense rate increases slightly. The company's gross profit margin lags behind the change of raw material costs for one or two quarters. 23 the prices of crude oil and olefin materials have fallen since the beginning of the year, driving the company's gross profit margin to rise.
According to Wind, 23Q3 UK Brent crude oil spot, polypropylene futures and polyethylene futures respectively year-on-year-14.1% take advantage of collectivization management, reduce cost and increase efficiency through scale effect. At the same time to promote the MES system, refined production process management and control. 23Q3 achieved a gross profit margin of 25.6%, an increase in 2.1pct compared with the same period last year.
23Q3 realized the sales expense rate, management expense rate, and R & D expense rate of 1.6%, 3.6%, 4.7%, respectively, compared with the same period of last year + 0.2pct/-0.2pct/+0.5pct. The rise in gross profit margin boosted the company's net profit margin, and 23Q3 achieved a return-to-home net profit margin of 13.3%, an increase in 1.3pct compared with the same period last year.
Environmental protection policy promotes the concentration of the industry, the development of recyclable materials with a single material, and the company actively invests in research and development to expand new markets and new business. Food safety and environmental protection policies are stricter, small and medium-sized production capacity is clear, leading concentration is expected to continue to improve. The company actively invests in R & D, 23Q1-3 R & D spending rate of 4.5%, year-on-year + 0.3pct, engaged in new product research and development with major customers, focusing on recyclable and recyclable packaging materials of a single material. At present, the main demand is to update and iterate the film materials of overseas multinational corporations, while promoting the expansion of film business application scenarios, such as toothpaste tubes, electronic products, cheese film and so on.
The company is a plastic soft bag leader, long-term business is sound, downstream for the public consumer goods leader, reflecting the counter-cyclical attribute. Benefiting from food safety, environmental protection policies and product upgrading trends, industry concentration continues to increase. In the short term, the company benefits from the profit flexibility brought about by the recovery of downstream consumption and the downward cost of raw materials. In the medium to long term, capacity expansion continues to contribute to revenue, film business and overseas market expansion open up growth space, and product structure upgrading boosts the profit margin center. The company continues its high dividend policy and provides a stable return. Maintain the 2023-2025 company to achieve the home net profit forecast of 443 million yuan, + 220%, 14.1%, 14.7%, respectively, compared with the same period last year, and maintain the buy rating, corresponding to a PE of 12, 10, and 9X.
Risk hint: downstream consumer demand is weak and oil prices fluctuate.