Description of the event
The company released its 2023 annual report. The cumulative revenue for the full year of 2023 was 6.778 billion yuan, down 16.91% year on year; net profit to mother was 446 million yuan, down 48.50% year on year; and net cash flow from operating activities was 875 million yuan, down 33.46% year on year. Among them, revenue for the fourth quarter of 2023 was 1,842 billion yuan, up 5.83% year on year; net profit to mother was 42 million yuan, down 52.80% year on year.
Incident comments
Demand for EVA continues to grow steadily, and there is plenty of room for future growth. According to data from the China Photovoltaic Industry Association, in 2023, China added 216.9 GW of PV installed capacity, up 152.0% year on year; module export volume was 208.1 GW, up 34.5% year on year.
According to Bloomberg New Energy's financial report, the world's new installed capacity will reach 444 GW in 2023, an increase of 76.2% over the previous year; the number of new global PV installations will reach 627 GW in 2025. The number of new PV installations at home and abroad is expected to continue to grow, and the demand for PV materials will also increase rapidly as the number of new PV installations continues to grow. According to Zhuochuang statistics, in 2023, China's EVA production was 2.154 million tons, with an apparent consumption of 3.339 million tons, an increase of 20.8% over the previous year, and the import dependency ratio was 41.7%. Over the next five years, total EVA demand is expected to grow at a compound rate of 9.2%, and the total EVA demand will reach 5.55 million tons by 2028.
The company's new EVA production capacity is about to be implemented, and POE will be deployed in the future. The company's EVA products currently have a production capacity of more than 150,000 tons/year. The device uses ExxonMobil kettle process technology, with a production capacity of 200,000 tons/year. It is planned to be put into operation in 2025. The device uses LyondellBasell tubular process technology. Both sets of plants mainly produce products such as photovoltaic film materials with high added value. After 2025, the company's EVA production capacity will exceed 350,000 tons/year. Furthermore, the company's 90,000 tons/year VA unit was successfully operated once in January 2024, making it possible to completely supply the raw materials for the existing EVA device. The company actively lays out the POE business, plans to build a 300,000 tons/year POE project, and produces a series of high-end olefin material products such as POE photovoltaic film materials and toughening materials. In the future, the company will also have two mainstream photovoltaic film products, EVA and POE, to further enrich the company's layout in the field of photovoltaic materials and enhance its core competitive advantage.
The company has broad room for future growth. 1. In the field of new energy: 1) The company's EVA production capacity is 200,000 tons/year, and is expected to be put into operation in 2025; 2) 90,000 tons/year VA units have been completed and put into operation; 3) Actively lay out the POE business and plan to build 300,000 tons/year POE projects, including the first phase of 100,000 tons/year and 200,000 tons/year in the second phase to produce POE photovoltaic film materials, toughening materials and other high-end olefin material products. The first phase of the project is expected to be completed and put into operation in 2025; 4) The first phase of the UHPE project is expected to be completed and put into operation in 2025; 4) The first phase of the UHPE project is expected to be completed and put into operation in 2025; 4) The company is currently constructing 20,000 tons/year of UHPE The device has already been installed In January 2024, the 4000 tons/year VC unit for the lithium battery additive project is scheduled to be completed and put into operation in 2024. 2. In the field of biodegradable materials: 1) The 130,000 tons/year PLA project under construction of the company uses self-developed “starch-high-gloss pure lactic acid-high-gloss pure lactate-polylactic acid” full industry chain technology. Among them, the first phase of the 100,000 tons/year lactic acid unit and 40,000 tons/year PLA device are scheduled to be completed and put into operation in the first half of 2024; 2) The 50,000 tons/year PPC plant under construction is scheduled to be completed and put into operation in 2025; 3. In the field of special fine materials: the 10,000 tons/year electronic specialty gas project under construction It will be completed and put into operation in the first half of 2024.
Without considering future share capital expansion, the company's net profit for 2024-2026 is estimated to be 480 million yuan, 710 million yuan, and 910 million yuan. The PE corresponding to the closing price on March 29, 2024 is 46.0 times, 30.9 times, and 24.2 times, maintaining a “buy” rating.
Risk warning
1. EVA's boom falls short of expectations; 2. The construction progress of the project falls short of expectations.