Brief performance review
On March 15 and March 20, the company released its 2023 annual report and annual report corrections respectively. The company achieved revenue of 987 million yuan in 2023, -2.33% YoY; net profit to mother was 158 million yuan, or -32.63% YoY. The performance was in line with expectations.
Management analysis
The overall operation of the company is stable. By business, in 2023, the company's inorganic chemicals business achieved revenue of 198 million, or -42.43%; the carboxyl chloride business achieved revenue of 661 million yuan, +20.56% year-on-year; and hydroxychloride achieved revenue of 111 million, +28.37% year-on-year.
In terms of expenses, the company's sales expenses in 2023 were 14.75 million yuan, -3.7% year over year; management expenses were 69 million yuan, +5.24% year over year; financial expenses - 7.07 million yuan. R&D expenses for the current period increased by 51.5 million yuan, -4.57% year-on-year.
The new material PEKK was gradually released, and the new lithium salt LIFSI was laid out. At present, the company has a PEKK production capacity of 100 tons/year, and a production facility with an additional 1,000 tons/year was installed in December 2023, and trial production and commissioning is being carried out by product sequence; the production capacity of meta/terephthalyl chloride is 32,000 tons/year, and the Weifang Kaisheng production base has built a new aramid polymer project of 20,000 tons/year. On November 29, 2023, the company announced the issuance of convertible bonds to raise 650 million yuan for the construction of the 10,000 ton LIFSI project, one of the core raw materials for the novel lithium salt (LIFSI). The company achieved new growth through the layout of LIFSI in the downstream new energy industry.
Profit Forecasts, Valuations, and Ratings
We expect the company's net profit forecast for 2024-2026 to be 1.99, 2.62, and 335 million yuan, respectively, EPS 0.47, 0.62, and 0.80 yuan, respectively. The PE corresponding to the current market value is 33.56X, 25.52X, and 19.94X, respectively, maintaining a “buy” rating.
Risk warning
Demand for products falls short of expectations, risk of falling product prices; progress of new projects falls short of expectations.