Events:
On October 27, the company released its third-quarter results report, showing that in the first three quarters of 2023, the company realized operating income of 587 million yuan, down 11% from the same period last year; net profit of 48 million yuan, down 44% from the same period last year; and net profit of 46 million yuan after deduction, down 45% from the same period last year.
Downstream customer pressure upward transmission, antioxidant industry profit pressure the company's revenue declined in the first three quarters of 2023 compared with the same period last year, mainly due to a 23% year-on-year decline in single antioxidant sales and a 16% drop in the average selling price of catalysts / antioxidants by 13%. The year-on-year decline in net profit is greater than that of revenue, mainly due to an increase of 14 million yuan in management expenses compared with the same period last year. Since the beginning of this year, the operating pressure of downstream customers is relatively large, the pressure of the industrial chain has been transmitted upward, and the overall profitability of the industry has declined in stages.
Q3 revenue improved month-on-month, Q4 profitability is expected to be repaired in a single quarter, Q3 company achieved operating income of 208 million yuan in 2023, down 7% from the same period last year, an increase of 13% compared with the same period last year; net profit returned to the home was 8 million yuan, down 58% from the same period last year and 61% from the previous year. The increase in revenue in the third quarter was mainly due to the increase in sales of catalysts and antioxidants; however, due to the 20% and 8% month-on-month increase in the purchase price of raw material phenol and isobutene in the third quarter, the company's gross profit margin fell 9.13pct from the previous quarter, thus putting pressure on the homing net profit. Looking ahead to Q4, as of October 27, the prices of phenol and isobutene have fallen 14% and 16% respectively from their September highs, and the company's profitability is expected to be repaired.
Polyolefin catalyst leader actively arranges POE high-end polyolefin
The company is deeply engaged in the field of catalysts and promoters, focusing on the catalytic polymerization and modification of olefins, forming a product series with the fourth generation Ziegler-Natta catalyst as the core, and has a variety of antioxidant core products and 100 kinds of compound auxiliary products. it can meet the one-stop and diversified needs of customers.
At the same time, the company has a large-scale layout of high-end polyolefin POE project, planning to build 400000 tons of POE and 300000 tons of α-olefins, of which the first phase will build 200000 tons of POE and 300000 tons of α-olefins. In September, the subsidiary signed an investment agreement with the local economic development zone management committee and a procurement agreement with equipment suppliers.
The company is expected to fully grasp the industrial opportunities in the field of metallocene catalyst and POE, and open up a new situation of growth.
Earnings forecast, valuation and rating
In view of the downturn in the company's traditional main business, we estimate that the company's income in 2023-25 will be 10 / 3 billion yuan (the previous value is 100 million yuan in 11-15-34), and the corresponding growth rate will be-19%, 38%, 19%, and 542 million yuan, respectively, respectively. The net profit of return to the mother will be 542 million yuan (the previous value is 2.7 billion yuan), and the corresponding growth rate will be-20% 76% 251%. The EPS is 0.65, 1.15 and 4.03 yuan, respectively, and the 3-year CAGR is 70%.
The company relies on industrial experience and technical advantages to expand the layout of metallocene catalyst field, we give the company 35 times PE in 24 years, corresponding to the target price of 40.15 yuan, downgraded to "overweight" rating.
Risk tips: the construction capacity is not as expected, the progress of key R & D projects is not strong, sales are not as expected, and the risk of production safety