The company achieved net profit of 530 million yuan in 23 years, which is in line with market expectations, which is in line with market expectations. The company's revenue for 23 years was 19.9 billion yuan, down 12%; net profit attributable to mother was 530 million yuan, down 61%; after deducting non-net profit of 480 million yuan, the same decrease of 67%. The gross margin for 23 years was 11%, a decrease of 5 pct. Among them, Q4 revenue was 4.8 billion yuan, down 3%, 4%, net profit to mother of 70 million yuan, down 81%, 43%, deducted non-net profit of 60 million yuan, same decrease of 82%, 43%, Q4 gross profit margin of 8%, and 1.3 pct. The company previously predicted net profit of 5-6 billion yuan for 23 years, which is in the median forecast, in line with market expectations.
23Q4 battery foil shipments fell by 8% + and are expected to grow by 30% in '24. The company's sales volume of aluminum foil products in '23 was 630,000 tons, a decrease of 4.3%. Among them, we expect battery foil shipments to be nearly 130,000 tons, an increase of about 18%, and 23Q4 battery foil shipments of nearly 35,000 tons, a drop of more than 8%; as downstream demand recovers, we expect the company's battery foil shipments to reach 16-170,000 tons in 24, an increase of about 30%. In terms of profit, we estimate that the net profit per ton of battery foil was nearly 40,000 yuan in '23, a decrease of about 40%. Among them, Q4 deducted about 30,000 yuan of non-profit per ton, a decrease of 10% + over the previous month; we expect a profit of around 0.25 million yuan per ton in '24, and it is expected to return to around 30,000 yuan in '25.
23Q4 overseas packaging foil continued to lose money, and a gradual recovery in demand in 24 years will turn the loss into a profit. We expect packaging foil shipments to be around 220,000 tons in '23, a decrease of 30% +, of which Q4 shipped about 50,000 tons, a flat month-on-month ratio; the company had production capacity of 120,000 tons of food packaging foil in Italy and 15,000 tons of food packaging foil in Germany by the end of '23, but losses due to weak demand for overseas food packaging foil and high production costs for overseas factories, the overall loss of Q4 food packaging foil was more than 50 million yuan; demand for overseas packaging foil will recover from 24Q2, and overseas bases can be gradually converted into battery foil production capacity. We expect to gradually turn a loss into profit in 24-25. We expect air conditioning foil shipments to be around 290,000 tons in '23, an increase of 25%. Of these, 23Q4 shipments will be around 100,000 tons, an increase of 60% +, basically maintaining a break-even balance.
Expenses were well controlled, and net cash flow from operating activities improved in Q4. The cost rate for the 23-year period was 7%, which was the same as the year-on-year rate. Among them, the Q4 cost ratio was 6.6%, a decrease of 1.1 pct, an increase of 0.2 pct; the investment loss in '23 was 90 million yuan, a decrease of 62%. Inventory at the end of '23 was $3.9 billion, up 12% from the beginning of the year and up 5% from the end of Q3; asset impairment losses of 50 million yuan were accrued in '23. Net cash flow from operating activities in '23 was 1.1 billion yuan, down 38%. Among them, Q4 net cash flow from operating activities was 300 million yuan, an increase of 192%; capital expenditure in '23 was 550 million yuan, the same as the previous year.
Profit forecast and investment rating: As demand for overseas packaging foil in Q1 is still weak, we lowered the company's profit forecast for 2024 and basically maintained the profit forecast for 2025. We expect 2024-2026 net profit of 5.0/73/95 billion yuan (the original forecast for 24-25), -6%/+46%/+31% year-on-year, corresponding PE is 20x/14x/10x, maintaining the “buy” rating.
Risk warning: Prices of raw materials continue to rise, battery foil production expansion falls short of expectations, and competition is intensifying.