① Jinhe Industrial expects net profit to drop by nearly 60% year-on-year in 2023, mainly due to the decline in sales prices of major products due to the impact of the industry cycle and market competition. ② The expansion of production capacity for food additives in recent years has led to oversupply, and overseas demand falls short of expectations. Prices of various varieties fell all the way down last year, but this year they are still declining. ③ Jinhe Industrial is still promoting a series of projects to expand the scale effect and extend the industrial chain.
Financial Services Association, January 24 (Reporter Wu Chao) Jinhe Industrial (002597.SZ) released a performance forecast this evening. Net profit in 2023 is expected to decrease by nearly 60% year on year. This means that the company will experience its first decline in annual performance in nearly three years, mainly due to the decline in sales prices of major products affected by the industry cycle and market competition.
According to the announcement, Jinhe Industrial expects to achieve net profit of 685 million yuan to 725 million yuan for the full year of 2023, a year-on-year decrease of 57.23%-59.59%; it is expected to deduct non-net profit of 610 million yuan to 650 million yuan, a year-on-year decrease of 64.66%-62.34%. Jinhe Industrial said that sales prices for major products all declined to varying degrees compared to 2022, leading to a year-on-year decline in the company's 2023 performance.
In addition, Jinhe Industrial also mentioned the impact of completing employee stock ownership plans and restricted stock incentive plans on performance. The share payment fee confirmed in 2023 is approximately RMB 87.184,500, which has been included in the profit and loss for the reporting period, which has had a significant impact on the current year's results. Excluding the impact of this factor, net profit attributable to 2023 is estimated to be 759 million yuan to 799 million yuan, a decrease of 55.56% to 53.22% compared with the same period last year.
Industry insiders told the Financial Federation reporter that Jinhe Industrial's main product, food additives, experienced a sharp drop in prices last year. The main reason was oversupply due to the expansion of production capacity by many companies in recent years, and in terms of demand, the weak performance of overseas economies last year dragged down exports to a certain extent.
According to reports, Jinhe Industrial's main food additives include sucralose, acesulfame, methyl malt powder, and ethyl maltol. According to industry statistics, the average price of the above products in the 2023 Q1 market was 22.6, 6.0, 9.8, and 710,000 yuan/ton, respectively. They have decreased by 40.7%, 19.5%, 13.3%, and 19.8% from Q4 in 2022, respectively. Since then, they have continued to decline. The average prices since the beginning of 2024 were 12.5, 3.8, 6.0, and 57,000 yuan/ton, respectively, in history. Low rank.
In addition, another important source of revenue for Jinhe Industrial is basic chemical products, including liquid ammonia, hydrogen peroxide, melamine, etc., which are constrained by the cyclicality of the chemical industry, and overall prices have been in a downward channel since last year. Take liquid ammonia as an example. According to Wind data, the average market price in early 2023 was 4,300 yuan/ton, the average price for the beginning of 2024 was 3,500 yuan/ton, and as of January 23, the average price was 3,080 yuan/ton.
Despite the pressure of industry cycles and market competition, Jinhe Industrial is still promoting a series of projects to expand scale effects and extend the industrial chain. Last year, the company completed the technical improvement of 5,000 tons of sucralose. Currently, the company is advancing infrastructure work for the second phase of the Dingyuan base project. According to previous disclosures, the main plan for this phase is to build projects with an annual output of 600,000 tons of sulfuric acid, 60,000 tons of chlorosulfonic acid, 60,000 tons of ionic membrane caustic soda, 60,000 tons of ionic membrane potassium and 150,000 tons of hydrogen peroxide.