Comprehensive profit attributable to company owners decreased by 82% year over year in 2023. In 2023, the company recorded revenue of approximately RMB 14.493 billion, a year-on-year decrease of 27.63%. Net profit realized was approximately RMB 611 million, a year-on-year decrease of 85%; while the comprehensive profit attributable to company owners was approximately RMB 708 million, a decrease of 82% year-on-year. Gross margin fell to 16.81% in 2023, down 15.72 percentage points year over year. The prosperity of the fluorosilicon chemical industry is low. The supply and production capacity of some products has increased, while the growth in downstream demand has not met expectations, leading to a marked decline in the prices of many major products in the industry. As a result, the performance of several major business segments of the company has declined to varying degrees.
The company has benefited from increased refrigerant prices. According to Baichuan Yingfu, as of March 22, 2024, the market price of R22 was 23,000 yuan/ton, up 2% from month to month; the market price of R32 was 25,500 yuan/ton, up 3% from month to month, up 31% year on year; the market price of R125 was 41,500 yuan/ton, up 6% from month to month, 68% year on year; the market price of R134a was 32,000 yuan/ton, up 31% year on year; market price of R142b was 16,000 yuan/ton, month on month An increase of 3%.
The results of the Fluoropolymer Materials segment showed a year-on-year decrease of 83% in profit. In 2023, the Fluoropolymer Materials segment reported a profit of RMB 337 million, a year-on-year decrease of 83.07%. The sharp drop in prices for important products in this segment is an important reason for the decline in its external sales revenue and performance. Among them, the price of PVDF products fell the most, and production capacity in the industry increased significantly, and the growth rate of downstream demand could not make up for the increase in production capacity. Although there was a year-on-year increase in product production in this segment, the increase in volume could not make up for the impact of falling product prices.
The refrigerants segment's performance decreased 70% year over year. In 2023, the refrigerants segment reported a profit of RMB 311 million, a decrease of 70% over the previous year. The main reason for the decline in the refrigerant business segment's performance was the decline in the price of R142b products. Due to changes in demand in the PVDF industry chain and the impact of the expansion of supporting production capacity of R142b by some PVDF manufacturers, demand in the R142b market declined, and its price dropped sharply compared to last year.
The silicone division's performance decreased 171% year over year. In 2023, the silicone division recorded a loss of RMB 331 million, a decrease of 171% year-on-year. The silicone market is affected by the economic situation, and demand is weak, while the domestic silicone industry's newly built production capacity has been fully released, leading to a short-term imbalance between supply and demand, intense market competition, and a decline in product prices, falling below the industry's cost line.
The performance of the methylene chloride, PVC and caustic soda segment decreased 46% year over year. In 2023, the Dichloromethane, PVC and Caustic Soda segment recorded a profit of RMB 248 million, a year-on-year decrease of 46.04%. The products in this segment are bulk chemical products, which are greatly affected by changes in the business environment. Product market demand in this segment is weak, product prices have been reduced, and the decline in raw material costs cannot make up for the decline in product prices, so profit levels have also declined.
Scientific and technological innovation has achieved remarkable results. The company is still based on the fluorosilicon chemical industry chain and maintains a certain R&D intensity. In 2023, the company added 101 new brand products, and a large number of new high-end material products entered the market sample or small-batch supply stage, laying a good foundation for the company to enhance the height and competitiveness of the industry; completed 148 new renovation and expansion, energy saving and emission reduction, automation upgrading, and quality improvement projects. Technological innovation also promoted the company's cost reduction and efficiency; 81 new authorized patents were added, currently 620 authorized patents; 22 standards were issued, including 2 national standards, 2 industry standards, 1 local standard, and 17 group standards. Currently, the company is hosting 127 standards of various types have been issued. The company spent approximately RMB 935 million on R&D in 2023, accounting for 6.45% of revenue.
Risk warning: changes in the macroeconomic environment; risk that downstream market demand falls short of expectations.