Event description
According to the company's three-quarter report for 2023, the company achieved revenue of 4.262 billion yuan in the first three quarters of 2023, an increase of 1.13% over the same period last year, and net profit of 272 million yuan, down 3.10% from the same period last year. In the third quarter, the operating income was 1.492 billion yuan, up 4.37% from the same period last year, up 5.16% from the second quarter; and the net profit from the home was 100 million yuan, up 46.16% from the same period last year, down 4.00% from the second quarter.
In the first three quarters of 2023, the company's gross profit margin was 15.95%, an increase of 0.52 pct over the first half of the year; the company's net profit margin in the first three quarters was 6.43%, an increase of 0.18pct over the first half of the year.
Event comment
Vietnam capacity release to promote steady revenue growth, new cord fabric investment to speed up the global layout. The company's 110000-ton differential polyester industrial filament project in Vietnam has been fully released in June this year, turning losses into profits. In addition, the company plans to invest about 52 million US dollars with self-raised funds to implement a high-performance tire cord fabric project with an annual output of 18000 tons, which is expected to further improve the level of global development.
The price pressure of polyester industrial silk affects the gross profit margin, but the company's automotive silk has the advantage of high barriers, and its performance is significantly better than that of the whole industry. According to Baichuan Yingfu, the average market price of polyester industrial silk in the third quarter was 8788.89 yuan / ton, down 1.16% from the second quarter; in terms of cost, affected by the rising price of upstream bulk raw materials, the average cost price of polyester industrial silk was 9058.57 yuan / ton in the third quarter, up 1.27% from the second quarter. The company's gross profit margin in the third quarter was 16.91%, down 0.21pct from the second quarter, and the net profit rate was 6.77%, which was 0.64pct lower than the second quarter. The decline in the company's profit side was significantly lower than the industry average, mainly because the company's automotive silk products had to be certified, the technical barrier was higher, and the cost plus model was adopted, so the profitability was more stable.
Set up an industrial investment fund to demonstrate confidence in the layout of the new materials industry. According to the announcement on the Establishment of Industrial Investment Fund by Foreign Investment, the company plans to jointly contribute to the establishment of an industrial fund with Xiamen Zongheng Jinding Private Equity Fund Management Co., Ltd. (hereinafter referred to as "Zongheng Jinding"). The total size of the fund plan is 200 million yuan, and the company, as a limited partner, intends to contribute RMB 198 million yuan, focusing on innovative new materials and new technology enterprises in related fields that have a certain cooperative relationship with the company.
Investment suggestion
We forecast that from 2023 to 2025, the company's revenue will be 56.05 billion yuan, 60.5 million yuan and 6.764 billion yuan respectively, an increase of 1.69%, 7.94% and 11.79% over the same period last year. To achieve a net profit of 3.88 million yuan, an increase of 16.85%, 15.45% and 23.59% over the same period last year, corresponding to EPS 0.33, 0.38, and PE of 16.04, 13.89, 11.24, respectively, maintaining the "overweight-B" rating.
Risk hint
Macro environmental risk: at present, the domestic economy is facing the triple pressure of demand contraction, supply shock and expected weakening, and geopolitical conflicts continue, which may lead to unstable upstream supply, rising raw material prices and lower downstream demand. in turn, it will have a negative impact on the company's future business development and operating performance.
Competition risk within the industry: China's manufacturing industry faces overcapacity, and the chemical fiber manufacturing industry where the company's chemical fiber products are located is also full of competition. The company is ahead of its peers in terms of technical quality, and differentiated products and services are the company's core competitiveness, but the fierce market competition may still lead to the risk of a decline in the profit margin of the company's products.
The risk that the promotion of photovoltaic reflective film is not as expected: at present, the company has landed the photovoltaic reflective film in foreign projects, and is continuously promoting the introduction of domestic projects, as the photovoltaic reflective film is an emerging technology, there is uncertainty in the early stage of customer acceptance. if the progress of the project is delayed, it may affect the promotion effect in the medium term in the future.
Risk of exchange rate fluctuations: the company's export sales are mainly settled in US dollars and euros, and overseas business is growing continuously, so exchange rate fluctuations may affect the company's profitability.