The performance forecast shows that the company's revenue in 2023 was 75-850 million yuan, +36.81% to 55.06% year-on-year
On December 21, 2023, the company released a performance forecast. The revenue for 2023 is expected to be 75-850 million yuan, +36.81% to 55.06% year over year, and net profit to mother of 8,000-86 million yuan, +20.80% to 29.86% year over year. According to the 2023 performance forecast, we slightly lowered the company's 2023 profit forecast. At the same time, considering the upward trend in the company's transactions with Zijin, we raised the company's 24-25 profit forecast.
We expect net profit to be paid to mother in 23-25 million yuan (previous value: 0.99/1.45/199 million yuan), corresponding to 23-25 PE 43/23/17 times. Comparable companies' 24-year PE average is 25 times higher.
Considering the scarcity of the company as the first A-share listed company for heavy metal pollution prevention and control in China and the broad market for non-ferrous heavy metal pollution prevention and control, the company was given 33 times PE in 24 years, corresponding to a target price of 53.79 yuan (previous value 36.75 yuan), maintaining a “buy” rating.
The company's 23Q4 revenue increased year-on-year/month-on-month, and revenue recognition accelerated
According to the company's “Notice on Granting Restricted Shares for the First Time to Incentive Recipients”, the company's equity incentive cost in 2023 is estimated to be 10.51 million yuan, and net profit to mother in 2023, excluding equity incentive costs, is estimated to be 9051-96.51 million yuan, an increase of 36.67%-45.73% over the previous year. The company's Q3 revenue recognition slowed down, but the company's revenue recognition had significant seasonal factors. The company's Q4 revenue in '21/22 accounted for 40%/43% of the full year's revenue. According to the company's performance forecast, 23Q4 revenue was 350 million yuan to 450 million yuan, up 61%-107% year on year, 165%-241% month-on-month, accounting for 50% of revenue in the fourth quarter (assuming revenue of 800 million yuan at the center of the forecast), and the company's revenue recognition accelerated significantly.
In 2024, the company expects transactions related to Zijin to not exceed 450 million yuan. Zijin will continue to help the company's development. According to the company's disclosure, the company expects the company's revenue stemming from Zijin Mining and its control to not exceed 450 million yuan in 24. According to the company's equity incentive assessment target, the company's total revenue target for 2023-2024 is 1.9 billion yuan. Assuming that the company's revenue assessment target is successfully completed and the revenue forecast for 23 is 800 million yuan, the company's revenue in 24 will reach 1.1 billion yuan, and the revenue from related transactions with Zijin in 24 will not account for more than 40.91%. The company's transactions with Zijin accounted for 25.78% of revenue in '22. From January to November 2023, the company's revenue with Zijin related transactions was 151 million yuan. As of December 18, Zijin held 21.22% of the company's shares, making it the company's second-largest shareholder. Zijin continues to help the company's development.
Focus on the company's main heavy metal environmental protection business “increase and transfer” and the development of new materials. Among the company's three major businesses (solutions, pharmaceuticals, and operations), solutions are incremental businesses, and the increase in revenue is conducive to subsequent operations and the increase in pharmaceutical stock business revenue. In 2022, the government issued “Opinions on Further Strengthening the Prevention and Control of Heavy Metal Pollution”. Driven by policy, the company's comprehensive solutions revenue is expected to grow at a high level in 23, and revenue from the operating services sector will grow steadily. In addition, the company's new materials environmental protection market project was successfully completed. With the “increase and transfer” of the company's main business, the promotion of the new materials business, and the support of the majority shareholder Zijin Mining, we continue to be optimistic about the company's future development.
Risk warning: The marketing of new technology is unfavorable, accounts receivable balances are large, and customer concentration is high.