Event: The company released its 2023 annual report. In 2023, the company achieved revenue of 4.320 billion yuan, an increase of 25.30% over the previous year, and achieved net profit of 766 million yuan, an increase of 1.02% over the previous year. With 2023Q4, the company achieved revenue of 1,248 billion yuan in a single quarter, up 25.81% year on year and 4.72% month on month; realized net profit of 275 million yuan, up 62.76% year on year and 25.98% month on month.
As for the amount of phosphate ore and phosphorus chemical products released, 23H2 performance improved significantly. Thanks to the volume of products such as calcium dihydrogen phosphate, monoammonium phosphate, phosphate ore, and iron phosphate, 23H2's net profit to mother increased year-on-year. In 23H2, the company's net profit to mother was 493 million yuan, up 27.4% year on year and 80.4% month on month. At 23H2, the company's revenue of calcium dihydrogen phosphate, monoammonium phosphate, phosphate ore, and iron phosphate products increased by 15.0%, 30.6%, 234%, and 33.3%, respectively. In terms of annual expenses, the company's sales/management/finance/R&D expenses in '23 changed by +28.0%, +10.0%, +60.2%, and -8.2%, respectively. Sales/management/finance/R&D expense ratios changed by +0.03pct, -0.79pct, +0.67pct, and -0.85pct, respectively.
Pay attention to shareholder returns for share repurchases, and the company's cash dividend ratio in '23 exceeded expectations. Based on confidence in the company's future stable development and recognition of the company's value, and in order to promote the company's long-term healthy development and create value for the company's shareholders, the company announced a plan to repurchase the company's shares in February '24. The company plans to use its own capital to repurchase 80 million yuan to 150 million yuan of company shares at a repurchase price of no more than 19.71 yuan/share. According to the company's 2023 annual profit distribution plan, the company plans to distribute a cash dividend of 10 yuan for every 10 shares. It is estimated that the total cash dividend will not exceed 595 million yuan, accounting for about 77.6% of the current net profit to mother. The company's total cash dividends increased 69.4% year over year in 2023.
The fixed increase is intended to expand 120,000 tons/year purified phosphoric acid production capacity and continue to improve the integrated mineralization layout. In December '23, the company issued 40.25 million shares to specific targets, raising a total of about 660 million dollars. All of the capital raised this time will be used to build the company's “120,000 tons/year food-grade purified phosphoric acid project using medium and low grade phosphate ore”, thereby further increasing the company's production capacity scale and competitiveness in the field of wet phosphoric acid purification, while also improving the industrial chain layout of the company's fine phosphorus chemical business. In addition, the company's Guangxi Fusui plant completed production capacity of 150,000 tons/year of calcium dihydrogen phosphate, 100,000 tons/year of purified phosphoric acid, and 30,000 tons/year of anhydrous hydrogen fluoride. The implementation of these additional production capacity will further expand the company's terminal product supply capacity and improve the company's integrated mineralization layout.
Profit forecast, valuation and rating: The company's 2023 performance was in line with expectations, and total cash dividends exceeded expectations. We maintain the company's 24-25 profit forecast and add a 26-year profit forecast. The company's net profit for 24-26 is estimated to be RMB 934/12.89/1,799 million yuan, respectively. The company continues to improve the integrated mineralization layout. With the implementation and climbing of new projects, the company's performance is expected to grow rapidly and maintain a “buy” rating.
Risk warning: price fluctuations of products and raw materials, risk of production capacity climbing, environmental protection and production safety risks.