Event: According to the company's 2023 three-quarter report, the company achieved operating income of 3,229 billion yuan from January to September 2023, an increase of 18.69% over the previous year, and realized net profit of 162 million yuan, a year-on-year decrease of 28.86%. Maintain a “buy” rating.
Weak product prices are dragging down performance. From January to September 2023, it achieved operating income of 3,229 billion yuan, an increase of 18.69% over the previous year, and realized net profit of 162 million yuan, a year-on-year decrease of 28.86%.
Among them, in the third quarter, the company achieved operating income of 1,149 billion yuan, an increase of 20.31% over the previous year, and net profit of 52 million yuan, a decrease of 42.86% over the previous year. Sales of fluoropolymer materials continued to grow, and in particular, new production capacity for advantageous products such as FEP continued to be released. The sector achieved sales of 18,900 tons in January-September, an increase of 81% over the previous year; and achieved revenue of 981 million yuan, an increase of 15.5% over the previous year. Weak recovery in the refrigerants industry has become a major drag on performance. High inventories are slow to be removed and industry exposure sales in 2023 led to weak price increases for refrigerant products. The company's overall revenue from fluorocarbon chemicals fell 28.6%.
The newly built production capacity is rich in reserves to support the company's continued growth in the future. The first phase of the Shaowu base project has been completed one after another, and the second phase, 10,000 tons/year PVDF, and 30,000 tons/year HFPO expansion projects have entered the full construction stage. The Inner Mongolia base was upgraded and expanded with 12,000 tons/year TFE, 12,000 tons/year HFP, 50,000 tons/year HFC-227ea, and 50,000 tons/year HFC-152a projects successfully put into operation, further improving the company's raw material self-sufficiency level. Projects such as 15,000 tons/year VDF, 60,000 tons/ton PVDF, and 10,000 tons/year of perfluorohexanone are progressing steadily, which will expand the company's new development space in the future. In the first half of the year, the company announced fixed growth plans and plans. It plans to expand the product layout of raw materials, fourth-generation refrigerants and polymers in Baotou, including 20,000 tons/year HFO-1234yf unit, 23,000 tons/year HFO-1234ze co-production HFO-1233ZD unit, 10,000 tons/year perfluorohexone unit, 180,000 tons/year methylene chloride plant, 250,000 tons/year calcium chloride plant, and 40,000 tons/year perchloroethylene plant, which will support the company's long-term development in the future.
Investment suggestions: The company's 2023/2024/2025 EPS is expected to be 0.63 yuan, 1.73 yuan, and 2.16 yuan respectively. The current market corresponds to PE 36X, 13X and 11X, maintaining the “buy” rating.
Risk warning: falling product prices, falling demand, project progress falling short of expectations, etc.