Events:
On October 28, 2023, Kaisheng Xincai released the third quarterly report of 2023: the company's operating income in the first three quarters of 2023 was 728 million yuan, down 4.32% from the same period last year; the net profit attributed to shareholders of listed companies was 134 million yuan, down 29.23% from the same period last year; the weighted average rate of return on net assets was 9.18%, down 5.22 percentage points from the same period last year. The gross profit margin of sales was 34.81%, down 3.78% from the same period last year, and the net profit margin of sales was 18.32%, down 6.50% from the same period last year.
Among them, Q3 achieved revenue of 236 million yuan in 2023,-0.55% year-on-year and-3.28% month-on-month; net profit of 31 million yuan,-46.87% and-40.38% respectively; Roe was 2.07%, 2.23% lower than last year and 1.51% lower than last year. The gross sales margin was 29.69%, 9.76% lower than the same period last year, 6.41% lower than the previous year; the net sales margin was 12.90%, 11.33% lower than the same period last year, and 8.54% lower than the previous year.
Main points of investment:
The price of thionyl chloride remains low, and the decline in gross profit margin puts pressure on the performance of Q3.
In the single quarter of Q3, the revenue was 236 million yuan,-3.28% compared with the previous quarter, and the net profit was 31 million yuan, a decrease of 21 million yuan from the previous quarter. Among them, the company's Q3 gross profit decreased by 18 million yuan compared with the previous month, which is the core reason for the decline in the company's Q3 performance; Q3 sales expenses / management expenses / financial expenses / R & D expenses were + 0 billion yuan respectively, and the expenses remained basically stable during the company period. In the case of little change in revenue, the decrease in gross profit is mainly due to the decline in gross profit margin. The company's Q3 gross profit margin is 29.69%, a month-on-month decrease of 6.41%. On the one hand, due to the continuous decline in the price of thionyl chloride and narrowing the price gap, according to Baichuan Yingfu, the average market prices of sulfoxide chloride Q2 and Q3 were 1579 yuan / ton and 1256 yuan / ton respectively in 2023, which decreased significantly compared with the previous year; on the other hand, the price of aramid polymeric monomer raw materials / terephthalic acid remained at a high level, reducing the profit space. According to Baichuan Yingfu, the price and price difference of thionyl chloride have shown an upward trend recently. with the recovery of product prices and the gradual recovery of downstream demand, the profit of the company is expected to be repaired.
The new production capacity of aramid polymerization monomer has gradually landed on the ground, tamping the company's growth base.
According to the company's 2022 annual report, the company's aramid polymerization monomer / terephthaloyl chloride production capacity is 3200 tons / year, in addition, Weifang Kaisheng production base will build 20000 tons / year aramid polymerization monomer project. According to the EIA report, the company's 3200 tons / year aramid polymerization monomer construction period is 12 months, and is expected to be completed and put into production this year. According to the company's semi-annual report in 2023, the company's 20000 tons / year aramid polymerization monomer project has started construction, the overall construction period of the project is 18 months, is expected to be completed and put into production in 2024. Aramid polymerization monomer is the company's leading product, the gradual landing of new production capacity is expected to push the company's performance level to a new level.
PEKK is expected to break through, the LiFSI project will be carried out gradually, and new products will open up room for future growth.
According to the research information released by the company on May 17, 2023, the company's 1000 t / a PEKK project is undergoing trial production and commissioning of sub-sequence products. according to the established plan, in view of the problems existing in the trial production process, the company's R & D personnel and workshop production personnel are adjusting the relevant equipment and production process, and the cost reduction work will be superimposed at the same time in the process. It is estimated that after completion, the production cost of PEKK can be reduced by about 30% to 40%. At the level of market development, the company's PEKK products have been sending samples in small batches to customers in many fields, and have been recognized by customers in many fields such as general profile (plate, bar, pipe). The safety acceptance procedures of the PEKK project have been completed by the end of 2023, and the company is completing the environmental acceptance procedures of the project, which is expected to be completed and officially put into production around the end of 2023. High-end new material PEKK gradually breakthrough and volume, is expected to improve the company's industrial chain, enhance the company's performance level and comprehensive competitiveness.
The company's convertible bond project of 10000 tons / year new lithium salt for lithium battery has been examined and approved by Shenzhen Stock Exchange on June 29, 2023. The company's developed and pilot-scale LiFSI products have sent samples to downstream potential customers such as Longyan Sikang, Shanshan shares and Zhongshan Optoelectronics, and the quality of the sample delivery products has been well received by customers. At present, the project is in the construction period, the construction period is 24 months.
LiFSI is expected to further open up the company's future growth space.
Profit forecast and investment rating take into account the company's operating situation in the first three quarters, product prices, new projects and new product market development progress, downstream demand and other factors, we appropriately adjust the company's profit forecast, the company's 2023-2025 net profit is expected to be 1.81,3.03,460 million yuan, corresponding to PE of 47,28,18 times. Considering the integrated layout of the company's sulfoxide chloride industry chain, the leading position of aramid polymerization monomers and the gradual launch of new production capacity in the future, PEKK and LiFSI are expected to open up incremental space and other factors, we are still optimistic about the company's future development and performance growth, and maintain the "buy" rating.
Risks suggest that product prices are significantly downward, project production progress is not as expected, technology development is not as expected, downstream demand expansion and market development are not as expected, raw material prices fluctuate sharply, industry competition intensifies, the international situation is volatile, and industry policies change substantially.