Net profit from 2023Q4 increased 36.85% month-on-month, and the company plans to distribute cash dividends totaling 662 million yuan (tax included). The company achieved operating income of 28.105 billion yuan in 2023, a year-on-year decrease of 7.28%, net profit to mother of 1,379 billion yuan, a year-on-year decrease of 76.44%, and net profit after deduction of 1,313 billion yuan, a year-on-year decrease of 78.30%. The decline in the company's performance was mainly due to varying degrees of decline in sales prices and production and sales of products such as glyphosate original drugs and silicone DMC over the same period last year. In the fourth quarter of 2023, the company achieved operating income of 6.178 billion yuan, a year-on-year decrease of 25.73%, a year-on-year increase of 13.27%, net profit of 445 million yuan, a year-on-year increase of 36.85%, a year-on-year decrease of 52.69%, after deducting net profit of 434 million yuan, an increase of 31.61% month-on-month and a year-on-year decrease of 58.90%. The company plans to distribute a cash dividend of 6 yuan (tax included) to all shareholders for every 10 shares. The total cash dividend is estimated to be about 662 million yuan (tax included), accounting for 48.01% of net profit attributable to mother in 2023. No bonus shares will be sent, and no share capital will be transferred from capital reserves.
Sales of major products increased, and mining revenue increased rapidly. 1) Specialty chemicals. The company's specialty chemicals mainly include electronic chemicals, food additives and other fine chemicals. In 2023, revenue was 5,028 billion yuan, down 19.26% year on year, gross margin fell 17.5 pct to 20.75% year on year, and sales increased 12.94% year on year to 444,900 tons. 2) Glyphosate series products. The company's glyphosate series products include glyphosate raw materials and formulations. The revenue in 2023 was 4.283 billion yuan, down 50.6% year on year, gross margin decreased 27.08pct to 31.01% year on year, and sales increased 10.58% year on year to 171,400 tons. 3) Fertilizer. The company's fertilizer products include monoammonium phosphate, diammonium phosphate and compound fertilizer. Revenue in 2023 was 3.606 billion yuan, up 4.59% year on year, gross margin decreased 10.38 pct to 8.70% year on year, and sales volume increased 22.55% year on year to 1,2397 million tons. 4) Mine mining. The company achieved operating income of 1,603 billion yuan in 2023, an increase of 87.36% year on year, and gross margin decreased 0.19pct year on year to 73.74%.
The construction of key projects is going smoothly, and the layout of the new energy industry is progressing comprehensively. The company is focusing on the construction of key projects to promote the transformation and upgrading of the company. In 2023, Xingfu Electronics' 30,000 tons/year electronic-grade phosphoric acid and other projects were completed and put into operation, and the company's comprehensive strength in the new microelectronic materials industry continued to increase; Hubei Ruijia's 50,000 tons/year photovoltaic glue, shareholder Hubei Phosphorus Fluoride Lithium Industry 200,000 tons/year battery-grade lithium dihydrogen phosphate and 10,000 tons/year high-quality lithium phosphate project (Phase I), and the holding subsidiary Hubei Xingyou New Energy's “200,000 tons/year iron phosphate project” was successfully put into operation, and the company's new energy industry layout was fully advanced; the company's new energy industry layout was fully advanced; annual microcapsules, 5000 m3/year aerogel felt, Hubei Jixing's 800 tons/year phosphating agent production capacity was put into operation one after another, cultivating new profit growth points for the company.
Profit forecast. We estimate that the company's net profit for 2024-2026 will be RMB 1,844, RMB 22.42, and RMB 2,738, respectively, and corresponding EPS of RMB 1.67, RMB 2.03, and RMB 2.48, 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 21.71-25.05 yuan (corresponding PB is 0.98-1.14 times), maintaining a “superior to market” rating.
Risk warning. Product prices fell, downstream demand fell short of expectations, and raw material prices fluctuated.