Description of the event
The company released its 2023 annual report: annual revenue of 22.43 billion yuan, an increase of 11.3% year on year; attributable net profit of 3.524 billion yuan, up 12.1% year on year, after deducting non-net profit of 3.495 billion yuan, an increase of 31.8% year on year.
Single quarter: Achieved operating income of 5.377 billion yuan, a year-on-year increase of 15%; attributable net profit of 768 million yuan, a year-on-year decrease of 3.4%, after deducting non-net profit of 787 million yuan, an increase of 96.7% over the previous year.
Incident comments
The main business is resilient, and the waterproofing business has improved markedly. By product: In 2023, the company's gypsum board, waterproofing, and keel business achieved revenue of 13.77 billion yuan, 3.9 billion yuan, and 2.29 billion yuan respectively, with year-on-year growth rates of +3.00%, +24.12%, and -9.05%, respectively. Judging from the revenue share, the share of gypsum board revenue for the whole year was 61.38%, down from 66.31% in 2022. Waterproof building materials and keels accounted for 17.41% and 10.21% respectively. By category: In 2023, Taishan Gypsum's revenue increased 9.0% year on year, net profit increased 19.1% year on year, Beixin waterproof revenue increased 24% year on year, net profit achieved a profit of about 150 million, revenue from other businesses (mainly Beixin headquarters) increased 8.7%, and performance estimates decreased 17.7% year on year (asset disposal revenue was high in the same period last year). Overall, the company's main business is highly resilient, and the waterproofing business was significantly restored in 2023.
Gypsum board sales increased in 2023, and profitability increased. In 2023, the company produced 2.165 billion square meters of gypsum board, up 3.34% year on year; sales volume was 2.172 billion square meters, up 3.78% year on year. Compared with the national sales volume of 3.211 billion square meters in 2023, the company's sales share was 67.6%, and the market share remained high. The price of gypsum board declined throughout the year, mainly due to the decline in average prices for protective paper etc. in 2023. Gypsum board achieved a gross profit margin of 38.5% for the whole year, an increase of 3.54 pct over 2022. Although the average price of the product fell, the company's profitability increased significantly year-on-year. Overall industry demand was stable in 2023, and the company continued to increase its profitability, showing the company's strong bargaining power and cyclical resistance.
Category expansion continues, and epitaxial business is performing well. 1) Waterproofing business: Achieved annual revenue of 3.90 billion yuan, an increase of 24.12% over the previous year; achieved net profit of about 150 million yuan for the whole year, a significant improvement over 2022, reflecting that after recent years of integration, the company's waterproof business is on the right track; 2) Coating business: The company completed the acquisition of Gabrielle by the end of 2023, which means that the two wings of the coating sector are accelerated, and the two wings are expected to develop in a balanced and rapid manner in the future; 3) Gypsum board+ rapid release. The company's other revenue in 2023 was $2.17 billion, up 149.56% year-on-year, and is expected to contribute mainly to gypsum board+related products. Its channel is highly consistent with gypsum board, the company's channel resources continue to perform, and gypsum board+ is expected to maintain a high growth rate.
Dividend rates have increased, and shareholder returns have been strengthened. In 2023, the company plans to distribute a cash dividend of 8.35 yuan (tax included) for every 10 shares, with a total profit of 1.41 billion yuan, corresponding to a dividend rate of 40.03%, up from 35% in 2022. For the first time since 2001, it reached more than 40%, corresponding to the current dividend rate of about 3%.
Investment advice: Incentives are in place, medium-term growth expectations are expected to be strengthened, and the valuation center is optimistic about improving. Not considering acquisitions other than Garbaoli. It is estimated that the 2024 and 2025 results will be 43.2 or 4.94 billion, corresponding to PE 11 or 9 times. It is recommended to focus on it.
Risk warning
1. Real estate completion expectations continue to be low;
2. The rate of category expansion is low as expected.