Net profit to mother increased 2.41% year over year in 2023. In 2023, the company achieved revenue of 3,902 billion yuan, +5.05% year-on-year; realized net profit of 299 million yuan, +2.41% year-on-year. Achieved deduction of non-net profit of 255 million yuan, -6.75% year over year. With 2023Q4, the company achieved revenue of 814 million yuan, -1.95% YoY, -19.10%; realized net profit to mother of 2.9644 million yuan, -90.56% YoY and -95.91% month-on-month; realized non-net profit loss of 254.367 million yuan, -208.06% YoY and -136.73% YoY. The company disclosed the 2023 equity distribution plan, which distributed a total cash dividend of RMB 53.9722 million.
It is a steady leader in the field of photovoltaic silica gel. The company focuses on the top photovoltaic customers to make efforts, stabilize stocks and seize incremental growth. With the help of new production capacity, the company continues to lead with a high share of leading customers, achieve steady growth in sales volume and sales, and adhere to the leading position in the industry. The layout and promotion of new products such as water-blocking adhesives, butyl adhesives, and UV adhesives have blossomed, and many customers have passed tests and certifications, and continue to build core competitiveness.
Import substitution in the high-end electronics sector is accelerating. The company is deeply involved in traditional stock markets such as power supplies and smart appliances to maintain a steady share of key customers; cultivate high-quality and high-value products, lay out incremental businesses such as mobile phones, smart wearables, automotive electronics, etc.; products such as PUR hot melt adhesives, epoxy underfill adhesives, tri-proof paint, UV adhesives, etc. are rapidly growing at benchmark customers in the fields of consumer electronics, chip packaging, automotive electronics, etc., and product gross margin increases.
Business in the major transportation sector is growing rapidly. In the field of new energy vehicles and power batteries, the company has maintained the steady supply and supply of polyurethane structural adhesives and thermal conductive adhesives to leading customers. Lithium battery anode adhesive PAA and SBR products have been tested and won bids by many customers. Some customers have achieved batch supply, and subsequent loading can be expected; adhesives for energy storage batteries have been supplied by many battery manufacturers, optical storage and integrators.
Overseas markets are growing steadily. The company continues to increase the development of benchmark customers in Southeast Asia, India, Turkey, etc.; in the fields of Japan, South Korea, Russia, etc., products such as automotive adhesives and electronic adhesives have made further breakthroughs, and many benchmark customers have passed tests to achieve mass supply. In 2023, the export business achieved steady growth in both sales volume and sales, with a year-on-year increase of more than 50%.
The layout optimizes domestic and foreign production capacity. In 2023, the company completed and put into operation a 30,000 tons of photovoltaic silicone sealant production line, 10,000 tons of polyurethane adhesive production line for lithium batteries, 15,000 tons of lithium battery electrode adhesive production line, 36 million square meter solar cell back film production line, and 39,300 tons of electronic adhesive intelligent production line. 2023H2, the company began construction of a photovoltaic backpanel construction project with an annual output of 26 million square meters in Vietnam; the company continued to invest in a photovoltaic single-component silicone sealant project with an annual output of about 44,000 tons in Xiangyang; initiated the acquisition of 51% equity of Anqing Hualan Technology Co., Ltd. to accelerate the strategic business capacity layout of lithium battery anode adhesive (SBR).
Profit forecast. We expect the company's 2024-2026 net profit to be $322, 3.62, and $421 million, respectively. Referring to companies in the same industry, we gave the company 17-19 times PE in 2024, with a corresponding reasonable value range of 9.86-11.02 yuan, maintaining a “superior to the market” rating.
Risk warning. Macroeconomic cycle; production safety expectations; raw material price fluctuations.