Event description

On the evening of October 30, Haohua Technology released its third quarterly report of 2023, saying that in the first three quarters of 2023, the company achieved revenue of 6.274 billion yuan, year-on-year-3.01%; net profit of 687 million yuan,-9.23%; and non-return net profit of 677 million yuan,-9.75% of the same period last year. Among them, the company achieved revenue of 1.97 billion yuan in the third quarter, year-on-year-18.83%, month-on-month-12.30%; return to the mother net profit of 184 million yuan, year-on-year-30.14%, month-on-month-33.10%; deduction of non-net profit of 178 million yuan, year-on-year-32.31%, month-on-month-34.88%.

Fluorine materials are under pressure, and other sectors are growing steadily, with a strong ability to withstand periodic fluctuations. The gross profit margin of the third quarter is 26.06%, year-on-year + 1.94pct, month-on-month + 0.31pct; net profit 9.35%, year-on-year-1.86pct, month-on-month-2.9pct. The gross profit margin rose month-on-month, while the net profit margin declined. Under the influence of the cyclical decline of the fluorine chemical industry, the prices of the main products of the company's high-end fluorine materials business plate decreased month-on-month during the reporting period, while the subsidiary Zhong Hao Chenguang stopped and overhauled its main production equipment in the third quarter, resulting in a decline in capacity utilization. It has a certain impact on the company's overall performance in the third quarter. However, the high-end manufacturing chemical materials sector has a strong ability to withstand cyclical fluctuations in the industry and maintains steady growth. Net profit in the first three quarters increased by 18.9% compared with the same period last year, and gross profit margin increased by 3.6pct compared with the same period last year.

In the first three quarters of the carbon reduction business, operating income increased by 21.9%, net profit increased by 64.5%, and gross profit margin increased by 1.5 percentage points. The electronic chemicals sector has basically remained stable, and its market share has increased steadily.

In terms of price, according to the company's operating data, in the third quarter, the price of polytetrafluoroethylene resin / fluorine rubber / fluorine gas / rubber sealing products / special tires / new polyurethane materials / special coatings is-4.09% compared with the previous quarter.

In terms of production and sales, the changes of production and sales of each product are differentiated. Under the influence of Morningside parking maintenance, production and sales have declined, year-on-year / month-on-month sales of polytetrafluoroethylene resin are-3% torque 12%, fluorine rubber sales are 8%, rubber sealing profile sales are 9%, special tire sales are 5% year-on-year / month-on-month, and special paint sales are 17% compared with the same period last year / month-on-month.

Cost side, sales expense rate / management expense rate / R & D expense rate / financial expense rate + 0.29pct/+2.15pct/-0.61pct/+0.49pct.

It is proposed to issue shares to buy 100% equity in Sinochem Lantian, and the fluorine chemical industry plate forms an industrial chain to complement each other. On August 15, 2023, Haohua Technology plans to issue shares from Sinochem Group and Sinochem assets to acquire Sinochem Blue Sky and raise funds to expand the production of fluorine chemical products, with a total amount of about 14.5 billion yuan. Sinochem Lantian was originally a fluorine chemical enterprise under Sinochem Group. Has from fluorite resources to HF to fluorocarbon chemicals / fluoropolymer / fluorine fine industry chain, with R134a, R125, CTFE, PVDF, PVF, Trifluoroacetic acid and other leading products, follow-up electrolyte, PVDF, fourth-generation refrigerants and other production expansion plans are larger, while Haohua Technology focuses on PTFE high-end fluoropolymers and fluororesins, Sinochem Lantian and Haohua Technology's fluorine chemical plate can form a good industrial chain complementarity and coordination. After the landing of this reorganization, the integration of the two fluorine chemical enterprises has deepened, and the profit level of Haohua science and technology will rise to a new level.

Investment suggestion

We believe that the company has a profound R & D background and has become an obvious R & D innovation-driven platform material company, choosing the track for sustained high growth, while focusing on high-end and differentiation, continuous optimization of product structure and periodic weakening. During the 14th five-year Plan period, the company's capital expenditure accelerated, and the company entered a period of rapid growth. During the reporting period, the silicone sealing profile project of Northwest Hospital has entered the stage of trial production; Zhonghao Chengguang 26,000 tons / year high-performance organic fluorine material project, Southwest Hospital clean energy catalytic material industrialization base project, dawning Yuan 100,000 high-performance civil aviation tire project construction has started construction of 46600 tons / year special new materials project and related raw material industrialization capacity building project.

As the price of fluorine chemical sector fell more than expected, we lowered our performance forecast by 2023. It is estimated that the net profit of Haohua Technology in 2023-2025 is 9.35,12.73 and 1.674 billion yuan (the original value is 11.98,13.37 and 1.751 billion yuan. Based on the principle of prudence, Sinochem Blue Sky has not been considered into the statement, fixed increase and other financing items have not been considered for the time being), EPS 1.03max 1.40max 1.84 yuan The corresponding PE is 29.61X/21.75X/16.55X. Maintain the buy rating.

Risk hint

(1) risks caused by price fluctuations of raw materials and main products; (2) risk of production safety

(3) Environmental protection risk

(4) the progress of project production is not as expected.

(5) the equity incentive is not as expected.