Core viewpoints

Yonghe shares achieved revenue of 3.229 billion in the first three quarters of 2023, an increase of 18.7% over the same period last year; net profit of 162 million, down 28.9% from the same period last year; and the company's overall gross profit margin of 15.73%, net profit of 5.03%. Corresponding to 2023Q3 realized revenue of 1.149 billion yuan, an increase of 20.4% over the same period last year, an increase of 0.7% over the same period last year; the net profit returned to the parent was 52 million yuan, down 42.6% from the same period last year and 35.6% from the previous year; and the company's 2023Q3 gross profit margin was 14.09%, with a net profit rate of 4.53%. The company promotes project construction. At present, the existing and planned projects include Shao Wuyong and fluorine chemical production base project Phase I and Phase II, Phase I FEP, 10,000 tons / year PTFE, 30,000 tons / year HFPO expansion project, Inner Mongolia Yong and 70,000 tons / year VDF project, 80,000 tons / year VDF, 0.6 thousand tons / year PVDF, 10,000 tons / year perfluorohexanone and other projects.

Event

On October 27, the company released its quarterly report for 2023: revenue in the first three quarters of 2023 was 3.229 billion, up 18.7% from the same period last year; net profit was 162 million, down 28.9% from the same period last year; and net profit was 151 million yuan, down 24.3% from the same period last year. The company's overall gross profit margin is 15.73%, and the net profit rate is 5.03%. Corresponding to 2023Q3 realized revenue of 1.149 billion yuan, up 20.4% from the same period last year, up 0.7% from the previous month; realized net profit of 52 million yuan from the same period last year, down 42.6% from the same period last year and 35.6% from the previous month; realized net profit of 49 million yuan after deducting non-return, down 28.6% from the same period last year and 36.5% from the previous year; the company's 2023Q3 gross profit margin was 14.09%, and the net profit rate was 4.53%.

Brief comment

Affected by the profits of major products such as refrigerants, 23Q3 achieved revenue of 3.229 billion in the first three quarters of 2023, an increase of 18.7% over the same period last year; net profit of 162 million, down 28.9% from the same period last year; and net profit of 151 million yuan, down 24.3% from the same period last year. The company's overall gross profit margin is 15.73%, and the net profit rate is 5.03%.

Corresponding to 2023Q3 realized revenue of 1.149 billion yuan, up 20.4% from the same period last year, up 0.7% from the previous month; realized net profit of 52 million yuan from the same period last year, down 42.6% from the same period last year and 35.6% from the previous month; realized net profit of 49 million yuan after deducting non-return, down 28.6% from the same period last year and 36.5% from the previous year; the company's 2023Q3 gross profit margin was 14.09%, and the net profit rate was 4.53%. In the short term, under the influence of the relatively off-season of refrigerants, the company's performance is under pressure. with the improvement of the next three generations of refrigerant industry and the gradual release of the company's product capacity, the company's profits are expected to be repaired step by step.

From a product point of view, the company's output of fluorocarbon chemicals / fluorinated polymer materials / chemical raw materials in the first three quarters of 2023 was 15,292,272,333 million tons respectively, of which Q3 production was 5.47pm 11,306 million tons, with month-on-month changes of + 14.7%, 24.4% and 2.3%, respectively. The external sales volume of Q3 is 1.89 trillion tons respectively, of which the external sales volume of Q3 is 5.54 million tons, with a month-on-month change of + 7.4%, 34.9% and 4.5% respectively. The average price is 2.04 million yuan per ton, and the revenue is 1.748 million yuan, 981 million yuan, 422 million yuan, respectively, with a year-on-year change of-0.6%, 60.5%, 53.5%, of which Q3 achieves revenue of 622 percent, 365,000,000 yuan, and month-on-month changes of + 3.1%, 4.4%, 17.8%, respectively.

Construction of projects under construction is accelerated, and R & D innovation brings growth momentum.

At present, the company's existing and planned projects include Shao Wuyong and fluorine chemical production base project Phase I and Phase II, Phase I FEP, 10,000 tons / year PTFE, 30,000 tons / year HFPO expansion project, Inner Mongolia Yonghe 70,000 tons / year VDF project, 80,000 tons / year VDF, 0.6 thousand tons / year PVDF, 10,000 tons / year perfluorohexanone and other projects. The steady progress of the planning project and the gradual release of product capacity will provide the company with long-term development momentum.

The quota scheme has been approved and is optimistic about the prosperity of the third-generation refrigerants.

On October 24, the Ministry of Ecology and Environment examined and approved in principle the Plan for the setting and Distribution of HFCs quotas in 2024, which set the total production quota of 2024 HFCs at 1.852 billion tons of carbon dioxide, the total import quota of HFCs for 2024 at 6 million tons of carbon dioxide, and the total production quota for domestic use of HFCs for 2024 to 898 million tons of carbon dioxide. For the total quota of 65% of the baseline value of HCFCs production and use, it will not be fully allocated to production units and users in 2024. After the implementation of the quota policy, the overall supply and demand pattern of the third generation refrigerants is expected to change from oversupply to a balance between supply and demand, and the prosperity of the industry will usher in an inflection point. In addition, the phase-out of second-generation refrigerants in China will also bring deterministic demand substitution increment to the third-generation refrigerants. from the long-term logic point of view, the pattern of the third-generation refrigerants is expected to be better.

Profit forecast and valuation: the company's net profit in 2023, 2024 and 2025 is expected to be 240 million, 610 million and 890 million respectively, EPS is 0.6,1.6 and 2.4yuan respectively, and PE is 36.6X, 14.5x and 10.0x respectively. Considering that the price of the third-generation refrigerant is expected to increase after the implementation of the subsequent quota policy, the company is expected to benefit from the integrated capacity layout. Maintain a "buy" rating.