Event: The company released its 2023 three-quarter report. From January to September 2023, the company achieved operating income of 3,229 billion yuan, +18.69% year-on-year, and net profit of 162 million yuan, or -28.86% year-on-year. In Q3 of 2023, the company achieved revenue of 1,149 billion yuan, +20.37% year-on-year, -49.82% month-on-month, net profit of 52 million yuan, -42.58% year-on-year and -60.84% month-on-month.
The increase in volume and price of main products from January to September 2023 dragged down performance. From January to September 2023, the company's export sales volume of fluorocarbon chemicals, fluoropolymer materials, and chemical raw materials sectors was 85700.91, 18900.05, and 158108.14 tons, respectively, +24.8%, +138.61%, and +131.67%. The average export prices were 20395.41, 51882.36, and 2669.79 yuan/ton, respectively, -20.37%, -32.74%, and -33.76%, revenue was 17.48, 9.81, and 422 million yuan, respectively, compared with- 0.63%, +60.49, +53.45% The fluorine-containing polymer materials sector was further expanded as new FEP and PTFE production capacity was put into production one after another. The export volume of chemical raw materials increased dramatically, mainly due to the release of chloride after the acquisition of Shilei Fluorine Chemical, but was greatly hampered by falling prices of main products, and the company's profit declined.
Fluorocarbon chemicals continued to grow month-on-month during the off-season, and the implementation of quotas is expected to begin a long business cycle. In Q3 of 2023, the export volume of the company's fluorocarbon chemical products was 31,724.55 tons, +7.44% month-on-month, and the average export price was 1960s 9.03 yuan/ton, -4.06% month-on-month. Since the third quarter was generally a traditional low season for refrigerants, the average price of the company's fluorocarbon chemicals declined slightly month-on-month, but the export sales volume maintained a month-on-month growth trend.
We believe that the current HFCs quota plan has been implemented. In 2024, HFCs will be produced and sold according to quotas. The supply side of the industry is bound by the quota policy, while downstream demand is rising steadily. The long-term positive trend has not changed. The company's fluorocarbon chemicals business is expected to benefit from the industry's long-term boom cycle and continue to improve.
The export volume of fluoropolymer materials has been further increased, and we are optimistic about long-term growth. In Q3 of 2023, the company's export sales volume of fluoropolymer materials was 8606.86 tons, +34.87% over the previous month, and the average export price was 42403.34 yuan/ton, -22.62% over the previous year. The company's new production capacity of fluoropolymer materials was in a climbing period, and export sales volume increased further, but prices declined due to weak downstream demand. We believe that after downstream demand picks up and product prices rise further, the company's performance is expected to continue to grow as the company continues to release fluoropolymer materials and the gradual improvement of product quality.
Investment suggestions: We expect the company's net profit from 2023-2025 to be 2.41/5.53/790 million yuan, EPS is 0.63/1.46/2.08, and corresponding PE is 38/16/11 times respectively. Considering that the company has a comprehensive fluorine chemical industry chain layout, it can effectively guarantee the competitiveness of the company's fluorine chemical products. Combined with the implementation of the current three-generation refrigerant quota plan, the refrigerant industry is expected to usher in a long-term upward boom cycle in the future. With the continuous release of the company's fluoropolymer project production capacity, future performance is expected Continuous dosage. Maintain the “Overweight” rating.
Risk warning: downstream demand falls short of expectations; risk of policy changes; project construction progress falls short of expectations;