The quarterly performance reached a record high, with high month-on-month growth. The company achieved revenue of 1,710 billion yuan in Q3 of 2023, -2.88% year-on-year, +15.78% month-on-month, net profit of 165 million yuan, +31.43% year-on-year, and +49.46% month-on-month. The company's Q3 performance resisted the impact of the consumption tax policy and achieved high month-on-month growth, fully demonstrating that it is driven by technical strength, has advantages in terms of product cost, flexible adjustment of product structure to respond to market changes, etc., and has growth resilience.
Research technology shows cost advantages. There are two main reasons for the company's high month-on-month growth in Q3. One is to seize market opportunities and increase shipments of high-profit products. The third quarter was the peak oil consumption season. Combined with the recovery in domestic travel demand this year and the official launch of the National 6B gasoline standard, the MTBE price spread continued to rise. At the same time, the export profit of the company's butyl acetate, which resumed production in the first half of the year, was impressive, further increasing profits. The second reason comes from the company's continuous research on technological innovation to continuously reduce the energy consumption, unit consumption and production costs of various products, so some products that have suffered phased setbacks are still able to maintain profitability and resilience. Since the consumption tax was levied on isooctane in early July, the price spread of isooctane has weakened after tax deductions, but with its leading technological transformation capabilities, the company's processing costs are significantly lower than the industry average, thus guaranteeing plant commencement and profits. In addition, part of the company's maleic anhydride by-product steam was transported to the isooctane plant, further enhancing its production cost advantage. In terms of maleic anhydride, the 150,000 tons/year maleic anhydride unit put into production by the company at the end of 2021 is the world's first single unit with the largest production capacity. The company developed its own catalysts, leading the industry in indicators such as raw material consumption, energy consumption, steam quality, etc., and the company is still continuously strengthening the cost advantage of maleic anhydride through technological improvements. Judging from EIA data, the energy consumption index of the subsequent 240,000 tons/year maleic anhydride unit is even better; the steam produced by maleic anhydride can also reduce production costs for other devices. In the first half of the year, it has saved about 25.4519 million yuan in power costs for its subsidiary Yuxin Chemical, while surplus sales are still available Generate revenue.
Focus on building and extending the maleic anhydride industry chain, and are optimistic about the company's long-term growth. The company's future priority light hydrocarbon comprehensive utilization project and 120,000 tons/year BDO and other installations will further extend the maleic anhydride industry chain layout, and the cost advantage of the company's maleic anhydride will continue to compete in the downstream BDO, PTMEG, PBS, PBAT and other product markets. Recently, the company's maleic anhydride catalyst project with an annual output of 500 tons was successfully put into operation, and the competitiveness of maleic anhydride products has been further strengthened.
The company has strengthened the cost advantages of various products through continuous technological innovation. Performance growth is resilient to industry fluctuations, and the first phase of the light hydrocarbon comprehensive utilization project is progressing steadily, and the first EIA information on capacity expansion and construction projects was announced. We adjusted the company's net profit for 23-25 to 5.50, 6.95, and 889 million yuan respectively (the original 23-25 was 5.39, 6.93, and 754 million yuan), and EPS per share was 1.72, 2.17, and 2.77 yuan respectively, giving comparable companies an average of 12 times PE after 24 years of adjustment, corresponding to the target price 26.04 yuan, maintaining the buying rating.
Risk warning: Project construction and commissioning progress falls short of expectations; overcapacity of some new products; progress of national six standards falls short of expectations; risk of fluctuations in raw material prices; changes in consumption tax policy; declining oil market sentiment.