Net profit in 2023 was -44.32% year-on-year, optimistic about the company's long-term development, maintaining that the “buy” rating company achieved revenue of 1,379 million yuan in 2023, or -13.63% year-on-year; achieved net profit of 235 million yuan, or -44.32% year-on-year. Net cash flow from operating activities was $347 million, +20.91% year over year. Since 2023, the price of maleic anhydride derivatives has fluctuated greatly. The company's overall revenue and profit are under great pressure, and the scale of revenue and profit has declined to a certain extent. Due to the company's comprehensive consideration of market factors, the postponement and delayed construction of some projects, we lowered the company's profit forecast for 2024 and 2025, and increased the profit forecast for 2026. The estimated net profit for 2024-2026 is 2.84, 3.21 (previous values 5.63, 7.07), and 369 million yuan, respectively. The corresponding EPS is 0.96, 1.08 (previous values 1.90, 2.39), and 1.25 yuan, respectively. The current stock price corresponding to 2024-2026 PE is 15.2, 13.4, and 11.7 times, respectively. We believe that after the cycle, the company will continue to maintain steady growth, and that high-value repurchases also reflect management's confidence. Currently, it is cost-effective and maintains a “buy” rating.
Shipments of maleic anhydride derivatives have increased rapidly, which is expected to benefit from the rapid construction of power grids and wind power. In 2023, the company sold 82,200 tons of maleic anhydride derivatives, up 21.69% year on year, and the capacity utilization rate reached 113.47%, of which use for wind power accounts for more than 10%; achieved revenue of 995 million yuan, a year-on-year decrease of 18.72%. According to China's power grid data, the total investment scale of the national grid construction is expected to exceed 500 billion yuan in 2024; according to international energy grid data, according to the 2024 wind power project plans of 14 provinces and cities, the total scale will reach 96.19 GW. Grid investment continues to accelerate the construction of high-intensity superimposed wind power, and demand for maleic anhydride is expected to maintain a high growth rate. The company's Qingyang project and Gulei project will also guarantee the long-term growth of the company's maleic anhydride anhydride business.
Functional intermediate materials are expected to benefit from the upward boom in the OLED industry in 2023. The company's functional intermediate materials achieved revenue of 231 million yuan, an increase of 8.87% year on year; gross margin reached 45.90%, up 10.52 pcts year on year, and the boom rebounded markedly. The company's OLED-related functional material intermediates have established competitive advantages in chemical synthesis and purification. The company's OLED Material Intermediates Research Center project obtained EIA approval on November 24, 2023. The Gulei Project's functional materials intermediate project will also guarantee future demand. As the OLED boom continues to rise, the company's upstream OLED intermediate material release is expected to bring considerable performance flexibility to the company.
Risk warning: Capacity construction progress falls short of expectations, downstream demand falls short of expectations, and raw material prices fluctuate.