The company announced 2023 results, with operating income of 23 billion yuan (+0.01% YoY), net profit of 88 million yuan (YoY -21.0%), of which 23Q4 revenue was 358 million yuan (YoY +16.0%, -9.9% YoY), net profit to mother was 0.18 billion yuan (-9.4% YoY, +0.8% YoY); the company announced results for the first quarter of 2024, with 24Q1 revenue of 386 million yuan (+21.5% YoY, +7.8% YoY), net profit 0.12 100 million yuan (-47.9% YoY, -32.9% YoY).
Comment:
The Hebi project is about to start production of 120,000 tons of special isocyanates. The company is building a special isocyanate integration project in Hebi, Henan. The first phase has a HDI production capacity of 100,000 tons/year, CHDI production capacity of 15,000 tons/year, and PPDI production capacity of 50,000 tons/year. As of mid-April, the basic construction of the main installation and single building of the project has been completed, and the final construction of the project is in progress. After the project is put into operation, it will achieve a breakthrough in the industrialization of upstream specialty isocyanate monomer materials, effectively reduce the cost of new materials, drive stock market growth and give new materials new application fields, drive growth in demand for specialty monomer materials, and achieve upstream and downstream industrial chain linkages. According to Baichuan Yingfu, the current price of HDI in East China remains at 32,000 yuan/ton, and the profit is relatively impressive.
The TPU business sales channel was further expanded, and the 100,000 tons/year TPU project in Yantai entered the trial production stage.
In 2023, the company diversified its product sales channels and achieved breakthroughs in market segments such as charging pile cables, textile adhesives, consumer electronics, and nonwovens. The company currently has a TPU production capacity of 90,000 tons, and the capacity utilization rate in 2023 is 92%. The company is actively consolidating its production capacity advantage in the TPU field. By the end of 2023, the TPU project located in the Dajijia factory area in Yantai has completed the construction of plants, utilities, and 100,000 tons of elastomer production capacity, and the remaining 100,000 tons of production capacity will be built according to market conditions and the company's operating conditions. With the official commissioning of 100,000 tons of production capacity, the company's TPU production capacity will be greatly increased to 190,000 tons, which will effectively ease the previous tight production capacity situation.
Investment advice: The company is expected to become a small giant in the polyurethane industry with its special isocyanate and TPU layout, as well as the future development blueprint for the Hebi Phase II project. We expect the company's revenue for 2024-26 to be 27/39/5 billion yuan (an increase of 26.5 billion yuan), +83%/+44%/+30% year-on-year. Net profit attributable to mother was 2.5/38/490 million yuan (an increase of 490 million yuan in 26 years), +185%/+54%/+28% year-on-year. Corresponding PE was 24X/16X/12X, respectively, maintaining a “buy” rating.
Risk warning: raw material prices fluctuate, project commissioning falls short of expectations, downstream demand falls short of expectations