Incidents:
On April 15, 2024, Hailide released its 2023 annual report: achieved operating income of 5.622 billion yuan in 2023, up 2.00% year on year; realized net profit of 349 million yuan, up 5.14% year on year; realized net profit after deduction of 354 million yuan, up 14.96% year on year; gross sales margin was 16.18%, down 0.42 pct year on year, net sales margin 6.24%, up 0.18 pcts year on year; at the end of 2023, the company's inventory value was 1,021 million yuan, same The year-on-year decrease was 6.40%; the net cash flow from the company's operating activities in 2023 was 808 million yuan, up 1.16% year on year.
In a single quarter of 2023Q4, the company achieved operating income of 1,360 billion yuan, +4.83% year over month; realized net profit of 77 million yuan, +50.27% year on year, -23.22% month on month; net profit without net return to mother was 79 million yuan, +63.80% year on year, -19.35% month on month; gross sales margin was 16.89%, +2.05 pcts year on month, -0.02 pcts month on month; net sales margin 5.68%, +1.8 pcts year on month, -1.09 pcts month on month pct; At the end of the 2023Q4 quarter, the company's inventory amount was 1,021 million yuan, -6.40% year-on-year, +6.32% month-on-month; 2023Q4 net cash flow from the company's operating activities in a single quarter was 121 million yuan, -77.46% year-on-year, and -34.83% month-on-month.
Investment highlights:
The company's product sales increased in 2023, and profits grew
In 2023, the company achieved revenue of 5.622 billion yuan, an increase of 2.00% over the previous year. By product sector, in 2023, the company's polyester industrial filament achieved revenue of 2,607 billion yuan, gross margin of 16.49%, +0.20 pcts year on year, sales volume of 2284 million tons, +13.16% year on year, average sales price was 11,400 yuan/ton, -10.83% year on year; tire curtain cloth achieved revenue of 1.84 billion yuan, +15.60% year on year, gross margin of 24.30%, 2.41 pct year on year, sales volume 66,500 tons, +25.66% year on year, average sales price 17,800 yuan/ton, -8.00% YoY.
In 2023, the company achieved net profit of 349 million yuan, up 5.14% year on year. The company's sales/ management/ financial/ R&D expense rates in 2023 are
1.02%/3.31%/2.92%/0.28%, +0.16/+0.38/ -0.97/-1.05 pcts year over year.
The reduction in the company's financial expenses is mainly due to the increase in the company's exchange earnings and interest income. At the end of 2023, the company's inventory value was 1,021 billion yuan, a year-on-year decrease of 6.40%. The net cash flow from the company's operating activities in 2023 was 808 million yuan, up 1.16% year on year, mainly due to a decrease in the company's operating cash flow outflow.
International strategic layout to consolidate superior position
In order to cope with the increasingly complex international political and economic environment, the company actively deployed strategic plans for global production capacity and promoted an international layout. The performance of the company's differentiated polyester industrial wire products has reached the international advanced level. In 2023, the company released 110,000 tons of differentiated polyester industrial filament (phase 1) production capacity in Vietnam, achieving full production and sales. Up to now, the company's polyester wire production capacity has reached 320,000 tons/year; the company's curtain cloth products rely on high-quality raw wire and have entered international first-tier brand tire manufacturers. In 2023, the company's high-performance technical improvement project successfully completed capacity investment. Up to now, the company's curtain cloth production capacity has reached more than 60,000 tons. At the same time, the company plans to expand its production base in Vietnam and plans to invest in the construction of an 18,000-ton high-performance tire cord cloth project.
The new composite materials project is progressing in an orderly manner and is expected to contribute to long-term incremental growth. The company has always insisted on product and technology research and development, and maintained its leading innovation advantage. The company focuses on product development and technical research in the field of new materials such as high-performance, green and low-carbon materials. Up to now, the company's high-end rolled film project with an annual output of 47,000 tons has completed equipment installation and commissioning for four of these production lines. The 12 million square meter stone plastic flooring project has been put into operation, and it is expected that production capacity will gradually be released. At the same time, the company strategically lays out the photovoltaic new energy industry and innovatively develops reflective film materials, which is expected to achieve revenue growth and innovative breakthroughs.
Profit forecast and investment rating We expect the company's 2024-2026 revenue to be 63.03, 71.61, and 8.210 billion yuan, respectively, and net profit to mother of 4.72, 5.25, and 590 million yuan, respectively, corresponding to PE 11.15, 10.03, and 8.93 times, respectively. The company focuses on polyester industrial filaments, cord cloth, and plastic materials. The release of production capacity at the company's Vietnam base in 2023 is expected to steadily contribute to increasing performance through a global layout. The company's new composite materials project is progressing in an orderly manner, and as production capacity is released one after another, it is expected to contribute to long-term growth. First coverage, giving a “buy” rating.
Risks suggest that the progress of new production capacity construction falls short of expectations; the risk of macroeconomic fluctuations; the risk of increased industry competition; the risk of fluctuations in raw material prices; the risk of exchange rate fluctuations; and changes in environmental regulations and energy control policies.