The company's net profit for 23 years was 776 million yuan, up 25.48% year on year. The company published the annual report for the year 23 and the quarterly report for '24. It achieved revenue/net profit to mother of 49.82/776 million yuan for the full year, +18.98%/+25.48% year over year, and realized net profit without deduction of 742 million yuan for the whole year, +23.07% year over year. Among them, Q4 achieved revenue/net profit to mother of 13.08/162 million yuan in a single quarter, +9.16%/+30.84% year-on-year, and net profit after deducting non-return to mother of 151 million yuan, or +24.69% year-on-year. 24Q1 achieved revenue/net profit attributable to mother of $1,26,221 million, +2.50%/+32.59% YoY, net profit net of non-return to mother of 210 million yuan, +36.14% YoY.

Revenue growth is strong, with borosilicate industry trends/expanding categories. I am optimistic that the company's revenue for molded bottles/brown bottles/control bottles/butyl rubber stopper/aluminum-plastic cap plastic bottles will reach 22.64/11.18/0.73/2.05/2.56 billion, respectively, +29.4%/+18.1%/+24.4%/+18.1%/+12.7%/-2.7%, respectively. We believe that the company's future performance growth engine is still quite strong, mainly because: 1) Demand for molded bottles is driven by consistent evaluation and continuous collection. The eighth and ninth batches of procurement were implemented in 23/24 and executed until 25/27, respectively. We expect demand for borosilicate molded bottles to continue to grow well. In '23, the company was building a borosilicate molded bottle workshop (with two kilns). One of these kilns was put into operation in November. In the future, the company will continue to expand production capacity and market share, and the growth momentum is strong. 2) In terms of brown bottles and daily chemical bottles, the company is actively exploring health and beauty markets, and will also expand production capacity and gradually expand to the middle and high-end markets in the future. 3) The company actively explores the international market. Foreign revenue in '23 reached +26% of 1.36 billion yuan, accounting for +1.6 pct of 27.3% year over year. The company's products have a certain degree of brand recognition in the international market, and have maintained long-term cooperative relationships with multinational companies such as Pfizer Pharmaceuticals, and has maintained long-term cooperative relationships with multinational companies such as Pfizer Pharmaceuticals, and has maintained long-term cooperative relationships with multinational companies such as Pfizer Pharmaceuticals. 4) In line with the booming development trend of the vaccine and biopharmaceutical industry, the company will expand and strengthen pre-packaged products and cultivate them as new growth points in the future.

Profitability was further improved. The overall gross profit margin of the company with excellent capital structure and cash flow in '23 was 28.03%, +1.19pct year on year. Among them, Q4 had an overall gross profit margin of 27.54% in a single quarter, +4.74/-3.16 pct, respectively. In 23 years, materials such as soda ash, coal, and borax operated at high prices, but the company achieved relatively good results in reducing costs. The gross margins of molded bottles/brown bottles/ampoules/control bottles/ butyl rubber stoppers/ aluminum-plastic cap plastic bottles were respectively

39.2%/23.8%/5.7%/-1.7%/24.6%/35.0%, -0.6/+3.0/ -2.0/ -11.2/+8.3/+3.9pct, respectively. In '23, the company finally achieved a net profit margin of 15.57%, +0.81 pct. Since the beginning of '24, there has been a clear downward trend in coal and soda ash prices, and profit margins have been further freed up. 24Q1 achieved gross profit margin of 30.6%, +6.9/+3.1 pct year over month, net interest rate of 17.42%, and +4.0/+5.1 pct yoy, respectively. The balance ratio at the end of 23 was 19.15%, -1.60pct year on year, and the capital structure was further optimized. The net operating cash flow in '23 was 1,048 billion yuan, +796 million yuan year on year, mainly due to the revenue ratio of +5.72 pct year over year of 94.49%, and the payout ratio of -10.74 pct year on year of 72.43%. The cash flow operation was excellent.

Strong growth momentum has good sustainability. Maintaining the “buy” rating, we expect the company's strong growth momentum to be sustainable; raw fuel prices have declined marginally, and we are optimistic that profitability will continue to recover. Considering that downstream demand continues to improve, the 24-25 net profit forecast was raised to 10.09/1,242 million (previous value: 9.45/1,179 million yuan), and the net profit forecast for 26 years was added to 1,468 billion yuan. Referring to comparable company valuations, considering the company's leading position, 25xPE was given for 24 years, corresponding to a target price of 38.01 yuan, maintaining the “buy” rating.

Risk warning: cost fluctuations; launch of new production capacity and sales below expectations; deterioration of the foreign trade environment, etc.