Net profit after deducting 2024Q4 was 983 million yuan, up 42.39% month-on-month and 17.84% year-on-year. The company released its 2023 annual report. In 2023, the company achieved operating income of 27.761 billion yuan, a year-on-year decrease of 0.63%; net profit to mother of 3.181 billion yuan, a year-on-year decrease of 27.81%; and net profit after deduction of 3.084 billion yuan, a year-on-year decrease of 26.93%. The decline in the company's annual revenue and net profit was mainly due to lower product prices. The company achieved operating income of 7.234 billion yuan in the fourth quarter, up 4.27% from the previous month, up 1.66% year on year; net profit from the fourth quarter to mother was 1,020 million yuan, up 29.22% from the previous month and 5.99% year on year; net profit after deduction for the fourth quarter was 985 million yuan, up 42.39% month on month, up 17.84% year on year. The expense ratio fell to 5.83% during the period, and the total dividend amount (including share repurchases) accounted for 65.71% of net profit to mother. In terms of dividends, the company plans to distribute a cash dividend of 0.417 yuan (tax included) per share in 2023. In 2023, the company will repurchase shares in cash for about 892 million yuan. In 2023, the company's total division of labor (including share repurchases) accounts for 65.71% of the net profit to mother in the consolidated statement. In terms of the period rate, the company's fee rate for the 2023 period was 5.83%, a year-on-year decrease of 0.67 pct. Among them, the management cost ratio decreased by 0.29 pct year on year, the financial expense ratio decreased by 0.42 pct year on year, and the R&D cost ratio increased by 0.13 pct year on year.
New amino acid products are progressing smoothly. In 2023, the company increased R&D investment and technical upgrading efforts. New glutamate, anaerobic valine, and glutamine strains were put into operation at the production base, and new processes for lysine and threonine achieved technological improvements, greatly reducing production costs; in 2023, the company's new projects such as xanthan gum, threonine, and raw ammonia achieved production results according to plan, helping to continue to expand its business scale and further strengthen its competitive strength.
Committed to becoming a leading synthetic biology company. The company has large-scale biological manufacturing capabilities including biotechnology, process capabilities, engineering capabilities and production management capabilities. In the future, the company will strengthen cooperation with the world's top biotechnology companies and institutions, focusing on sorting out technology and product opportunities in the direction of basic synthetic biology technology, precision fermentation, and non-food fermentation technology, and continue to promote advanced production R&D technology and the absorption and implementation of new products in combination with the company's world-leading chassis engineering, process expansion and large-scale production capacity. In the future, the company will adopt various methods to flexibly advance the progress of the project, and will adopt different models of cooperation according to the different development stages, technical characteristics and business models of the project. In addition to traditional technology licensing models, it will also explore project cooperation through joint ventures, minority equity investments, and mergers and acquisitions to actively broaden strategic channels for obtaining new technologies and products.
Profit forecast. We estimate that the company's net profit for 2024-2026 will be 35.30, 38.84, and 4.286 billion yuan, respectively, and the corresponding EPS will be 1.20 yuan, 1.32 yuan, and 1.46 yuan, respectively. Referring to companies in the same industry, we gave the company 10-12 times PE in 2024, with a corresponding reasonable value range of 12.0-14.4 yuan, maintaining a “superior to the market” rating.
Risk warning. Product prices fell, downstream demand fell short of expectations, and raw material prices fluctuated.