The company's net profit for 23 years was 462 million yuan, up 29.75% year on year. The company released its annual report. It achieved annual revenue/net profit of 7.970/ 462 million yuan for the whole year, +6.85%/+29.75% year over year, and realized net profit without deduction of 501 million yuan for the whole year, +33.25% over the same period last year.
Among them, Q4 achieved revenue/net profit to mother of 21.65/039 billion yuan in a single quarter, +21.96%/+166.29% year-on-year, respectively, after deducting net profit of non-return to mother of 76 million yuan, or +332.28% year-on-year.
Glass product structure continues to be optimized, and soda ash profits increase
1) Glass business: The company's glass business achieved revenue of 5.39 billion yuan, +24.61% year-on-year, of which technical glass/architectural glass/ coating and deep-processed energy-saving glass/photovoltaic glass were 18.9/17.0/7.2/1.07 billion yuan respectively, +3.9%/+30.1%/+36.5%/+61.1% year-on-year, and sales volume +11%/+30%/+92%/72% year-on-year respectively. Through product restructuring, the company has further increased its share of high-value-added products to enhance profitability. In terms of photovoltaic glass, the company has the ability to support two types of photovoltaic modules. The Malaysian second-tier was put into operation in the first half of '23 and achieved production relatively quickly. Cooperation with FS continues to advance. TCO glass is also basically completed. TCO glass is expected to accelerate release in 24 years. In addition, rolled glass continues to increase profitability through internal mining. In 23, Ningxia Jinjing achieved net profit of 32.67 million, an increase over the previous year. 85.17 million yuan. 2) Chemical business: The company's revenue from chemical products in '23 was 3,914 billion yuan, -5.81% year-on-year, mainly due to falling prices. Sales volume was 1.379 million tons, a slight increase of 1.76% over the previous year. Benefiting from the reduction in raw materials and energy costs, gross profit per ton increased by 87 yuan to 727 yuan/ton over the same period last year. In the end, the subsidiary Haitian Biotech achieved net profit of 570 million yuan, +24% over the same period last year.
Expense control has been strengthened, and net interest rates have increased
The company's overall gross profit margin in '23 was 18.19%, +1.53pct year on year. Among them, Q4's overall gross profit margin in a single quarter was 18.27%, and +2.30/ -2.19pct yoy, respectively. The gross margin of the glass business in '23 was slightly +0.43pct year-on-year, of which architectural glass and photovoltaic glass were +7.5pct/+16.42pct, respectively, while technical glass, coated, deep-processed and energy-saving glass were -11.72 pct/-2.68pct, respectively. We expect mainly due to structural adjustments, with a gross margin of +4.74pct of chemical products reaching 25.62% year over year. The cost ratio for the 23-year period was 8.87%, -0.23pct year on year. Among them, sales/management/R&D/finance expense ratios were -0.10/-0.26/+0.23/ -0.10pct year on year, respectively, and finally achieved a net interest rate of 5.88% and +1.25pct year over year.
Optimistic about the company's TCO glass growth and maintaining the “buy” rating
The company is a leading domestic TCO conductive film glass enterprise. It has a clear first-mover advantage in terms of production capacity, technology, and customers. With the gradual advancement of domestic perovskite production capacity and breakthroughs from foreign customers, TCO glass is expected to begin to expand in 24 years and continue to be optimistic about the company's medium- to long-term growth. Considering the slow recovery in glass prices, the company lowered its 24-25 net profit forecast to 51/750 million yuan (previous value: 92/1.18 billion yuan), and added a net profit forecast of 0.3 million yuan for 26 years, referring to the company's TCO glass business Growth, giving the company a target PE of 14 times in 25 years, corresponding to a target price of 7.3 yuan, maintaining a “buy” rating.
Risk warning: Downstream demand falls short of expectations, industry competition intensifies, production costs have risen sharply, company capacity growth falls short of expectations, etc.