Incident: The company released its 2023 annual report. In 23, the company achieved operating income of 93 billion yuan, an increase of 12.7% over the previous year, and realized net profit of 1.4 billion yuan to mother, an increase of 1.47 billion yuan over the previous year. Among them, the company achieved revenue of 232 billion yuan in a single quarter, down 6.4% year on year, down 7.1% month on month, and realized net profit to mother - 690 million yuan, up 180 million yuan year on year and 960 million yuan month on month.
Comment:
Demand in the chemical market fell short of expectations, putting pressure on Q4 results in 2023: in Q4 of 2023, the average sales prices of the company's diesel, gasoline, aviation kerosene, PX, polyethylene, and polypropylene were 7412 yuan/ton, 9026 yuan/ton, 3,821 yuan/ton, 7375 yuan/ton, 8174 yuan/ton, 8073 yuan/ton, +5%, +6%, +2%, +2%, +9%, +9%, +1%, +1917%, respectively.%. In terms of production, the company's diesel, gasoline, aviation kerosene, PX, polyethylene, and polypropylene production was 700,000 tons, 860,000 tons, 170,000 tons, 110,000 tons, 110,000 tons, and 80,000 tons, respectively, -28%, +11%, -2%, -6%, and -29% month-on-month, respectively. In terms of sales, the company's sales volume of diesel, gasoline, aviation kerosene, PX, polyethylene, and polypropylene were 740,000 tons, 870,000 tons, 170,000 tons, 110,000 tons, and 90,000 tons, respectively, -24%, +15%, +42%, 0%, 0%, and -20% month-on-month, respectively. In terms of price differences, the price differences for refining, PX, and polypropylene were 737 yuan/ton, 1,529 yuan/ton, and 641 yuan/ton, respectively, compared with +37 yuan/ton, +299 yuan/ton, and +79 yuan/ton, respectively. 23Q4 chemical market demand fell short of expectations, and the company's petrochemical product profits declined, putting pressure on Q4's performance.
Carbon fiber projects are gradually being put into operation, and the layout of new materials is progressing steadily: carbon fiber composites have excellent performance, good downstream demand, and a wide range of applications. It is expected that during the “14th Five-Year Plan” period, carbon fiber composites will usher in a period of rapid development, and there is plenty of room for future development. In '23, the first phase of the company's 24,000 tons/year raw wire and 12,000 tons/year 48K large wire bundle carbon fiber project was put into operation; a 100-ton high-performance carbon fiber test device was put into operation. The company insists on strengthening the core industry of high-end new materials such as “carbon fiber”, and uses polyolefins, elastomers, and the development strategy of the high-end new materials industry chain as breakthroughs and extensions, anchoring the direction of digital intelligence, green innovation, and high-quality development, and accelerating transformation and upgrading. In addition, the company is speeding up the construction of high-quality development projects and industrial chain layout, and is steadily advancing the construction of key projects such as comprehensive technological transformation and upgrading, thermoplastic elastomers, and thermoelectric power unit cleaning and efficiency improvement. As the projects under construction progress steadily, the company's new material layout is expected to continue to improve.
Profit forecast, valuation and rating: The profitability of the refining and chemical sector of companies with high oil prices is under pressure, so we lowered the company's profit forecast for 2024-2025 and added a profit forecast for 2026. The company's net profit for 2024-2026 is 3.11 (58% reduction)/6.59 (24% reduction)/1,045 billion yuan, respectively. The corresponding EPS is 0.03/0.06/0.10 yuan, respectively. The company's carbon fiber project is progressing steadily, and there is plenty of room for future development, so it maintains the “gain” rating for the company's A shares and H shares.
Risk warning: the risk of large fluctuations in crude oil prices, the risk that downstream demand falls short of expectations.