The company released its quarterly report for 2023, and its performance was lower than expected. During the reporting period, the company achieved revenue of 1.565 billion yuan (YoY-15%), net profit of 314 million yuan (YoY-35%) and non-return net profit of 256 million yuan (YoY-46%).
Among them, 23Q3 achieved a revenue of 535 million yuan (YoY-3%,QoQ+2%) in a single quarter, a net profit of 72 million yuan (YoY-52%,QoQ-61%) and a non-return net profit of 53 million yuan (YoY-62%,QoQ-67%). The performance was lower than expected. 23Q3's single-quarter gross profit margin was 26.06%, down 10.19pct from the same period last year, 0.46pct from the previous year, and net profit of 16.61% from the same period last year, 12.99pct and 20.08pct from the same period last year. The sales, management, R & D and financial expenses of 23Q3 in a single quarter were 0.09,0.40,0.40 and-32 million yuan respectively, with month-on-quarter changes of + 0.02,0.14,0.04 and + 110 million yuan, respectively.
The demand for long-chain dicarboxylic acid is weak, sebacic acid capacity is gradually released, and polyamide business has not yet dragged down the performance. The company is a pioneer in the field of domestic biological manufacturing, realized the industrialization of biological long-chain dicarboxylic acid in 2003, and gradually completed the market substitution of similar products of chemical method, leading the world in market share. Since 2023, the company's long-chain dicarboxylic acid business has developed steadily, domestic and American sales have continued to improve, but the European market demand is relatively weak. At the same time, with the gradual release of 40,000 tons of sebacic acid production capacity last year, the product has been recognized by domestic customers, and international customer certification is also being promoted in an orderly manner. It is expected that the product will quickly replicate the substitution process of lauric acid to chemical method. In the aspect of bio-based polyamide, the related products are in the early application scenario development and verification stage, and have not officially entered the volume stage, which is a drag on the company's performance.
Continue to promote the application and development of bio-based polyamide, join hands with China Merchants Group to strengthen market promotion, and open up new growth space for coordinated development. The company continues to increase the application, development and promotion of biological and polyamide products, and has made positive progress in textiles and clothing, cord fabric and composite materials with the advantages of "raw materials can be recycled, products can be recycled and costs can compete". In June this year, the company issued a plan to raise no more than 6.6 billion yuan in shares issued by Shanghai Yaoqin (to be established). The China Merchants Group is expected to hold more than 5% of the company indirectly through Shanghai Yaoqin. At the same time, the company signed a "Business Cooperation Agreement" with China Merchants Group. According to the agreement, the amount of bio-based polyamide resin in the products purchased and used by China Merchants in 2023-2025 is not less than 1, 8 and 200000 tons respectively. China Merchants Group is mainly engaged in shipping, port, shipping, finance, real estate, energy and many other fields, combined with the company's bio-based materials and the resource endowment of China Merchants, jointly develop bio-based polyamide fiber composite, pultrusion process and container, construction, photovoltaic, logistics and other fields of application technology, providing a broad application scene for synthetic biological manufacturing. In terms of production capacity, the company's Taiyuan base 500000 tons of pentylenediamine and 900000 tons of polyamide projects in an orderly manner to provide protection for the follow-up business volume. Up to the third quarter of 2023, the company is under construction of 4.849 billion yuan, an increase of 1.685 billion yuan compared with the end of 2022.
Investment analysis opinion: Q3 performance is lower than expected, and the promotion of bio-based polyamide still takes time. The company's net profit forecast for 2023-2025 is 4.21,7.19 and 1.058 billion yuan (the original value is 5.24,8.11 and 1.146 billion yuan), and the current market value corresponds to PE of 75,44,30X. China Merchants is expected to increase its performance in the future, and the compound profit growth rate from 2023 to 2025 is expected to reach 59%, maintaining the "holding" rating.
Risk tips: 1) new project construction progress, product production progress and sales uncertainty risk; 2) core technology leakage, technical personnel loss and technology research and development lag risk; 3) raw material and energy price fluctuation risk.