Main points of investment
Event: the company released its three-quarter report in 2023, with revenue of 6.274 billion yuan in the first three quarters, down 3.01% from the same period last year; net profit from home was 687 million yuan, down 9.23% from the same period last year; and net profit from non-return was 677 million yuan, down 9.75% from the same period last year. 2023Q3's single-quarter revenue was 1.97 billion yuan, down 18.83% from the same period last year and 12.30% from the previous year; the net profit from home was 184 million yuan, down 30.14% from the same period last year and 33.10% from the previous year; and the net profit from non-return was 178 million yuan, down 32.31% from the same period last year and 34.88% from the previous year.
High-end fluorine materials business is affected by the cyclical decline of the industry and device parking maintenance, high-end manufacturing chemical materials and carbon emission reduction business to achieve high-quality growth. In the first three quarters of 2023, the market prices of the main products of the fluorine chemical industry, such as PTFE, PVDF, and fluororubber, continued to decline. At the same time, the subsidiary Zhong Hao Chenguang stopped and overhauled the main production equipment in the third quarter of 2023. The company's revenue of PTFE resin and fluororubber fell 18.2% and 35.9% respectively compared with the same period last year. Thanks to the characteristics of multi-variety, small batch, high-end and customization, the high-end manufacturing chemical materials sector has a strong ability to resist cyclical fluctuations in the industry. The net profit in the first three quarters increased by 18.9% compared with the same period last year, and the gross profit margin increased by 3.6 pct compared with the first three quarters of 2022. The revenue and net profit of the carbon reduction business in the first three quarters increased by 21.9% and 64.5% respectively compared with the same period last year, and the gross profit margin increased by 1.5 pct compared with the first three quarters of 2022. The electronic chemicals sector has basically remained stable, and its subsidiary Haohua Gas continues to expand its share in domestic panel leading enterprises.
The construction of the company's project is carried out in an orderly manner. The silicone sealed profile project of Northwest Hospital has entered the stage of trial production; Zhonghao Chengguang 26,000t / year high-performance organic fluorine material project, Southwest Hospital clean energy catalytic material industrialization base project, dawning Yuan 100,000 / year high-performance civil aviation tire project has been successfully promoted; Limingyuan 46600 tons / year special new material project and related raw material industrialization capacity building project have started construction.
Investment suggestion: the company's core business serves the national core industries such as integrated circuits and civil aviation, with continuous improvement in product research and development and achievement transformation, and positive capital expenditure to ensure sustained growth. Combined with the company's three-quarter report in 2023, we adjust the company's home net profit forecast for 2023-2025 to 11.90,14.66 and 1.808 billion yuan to maintain the "overweight" rating.
Risk tips: the risk that the company's project construction is slower than expected; the risk of raw material price fluctuations; the risk of intensified competition in the industry.