Net profit after deduction in 2023 fell 43.15% year on year, and sales of major products increased steadily. In 2023, the company achieved operating income of 21.579 billion yuan, a year-on-year decrease of 29.80%, net profit to mother of 7.914 billion yuan, a year-on-year decrease of 49.17%, and net profit after deduction of 8.724 billion yuan, a year-on-year decrease of 43.15%. In 2023, the company sold about 5.6 million tons of potassium chloride, up 13.3% year on year, and sold 37,600 tons of lithium carbonate, up 24.62% year on year. According to the minutes of the company's investor meeting, in 2024, the company expects to produce 5 million tons of potash fertilizer and 40,000 tons of lithium carbonate, completing production and sales balance. The company achieved operating income of 5.789 billion yuan in the fourth quarter of 2023, down 0.79% from the previous year, down 19.57% year on year, net profit to mother of 2,314 billion yuan, up 360.67% month on month, down 33.64% year on year, net profit after deducting 3.119 billion yuan, up 599.65% month on month and down 2.15% year on year.
Potassium chloride prices have rebounded slightly. According to Zhuochuang information, as of April 3, 2024, the reference price of domestic potassium chloride products was 2308.33 yuan/ton, up 1.47% from the previous month. Compared with 2,165 yuan/ton on March 29, 2024, the average weekly price was 2269.44 yuan/ton, an increase of 4.29% from week to month. According to Zhuochuang information, the domestic supply-side potash fertilizer stocks are currently large, but spot supply has been tightened, terminal demand has started, the phenomenon of downstream inventory replenishment has increased slightly, and the downstream mentality of “buying up, not buying down” is active. Zhuochuang News expects the domestic supply of potassium chloride to be tightened, and it is just necessary to start filling up positions at the grassroots level one after another. However, the market voice favors upstream, and it is expected that the price of potassium chloride will still rise.
Focus on “expanding lithium” and accelerate the 40,000 tons/year lithium salt project. The company's new 40,000 tons of basic lithium salt integration project is expected to be completed by the end of 2024. The project is planned to build a new project with an annual output of 20,000 tons of battery-grade lithium carbonate+20,000 tons of lithium chloride, and obtained EIA approval from the Haixi Mongol and Tibetan Autonomous Prefecture Ecological Environment Bureau on March 24, 2023. The company is making every effort to accelerate the construction of this project and strive to improve construction efficiency while maintaining high quality. It is expected that the project will be completed by the end of 2024. At that time, it will inject new impetus into the company's business development and push the company to achieve greater breakthroughs in the field of new energy materials.
Profit forecast. We estimate that the company's net profit for 2024-2026 will be 74.13, 82.82, and 9.033 billion yuan, respectively, and the corresponding EPS will be 1.36 yuan, 1.52 yuan, and 1.66 yuan, respectively. Referring to companies in the same industry, we gave the company 13-15 times PE in 2024, with a corresponding reasonable value range of 17.68-20.40 yuan (corresponding PB is 2.44-2.82 times), maintaining a “superior to market” rating.
Risk warning. Product prices fell, downstream demand fell short of expectations, and raw material prices fluctuated.