Incidents. On April 22, 2024, the company released its 2023 and 2024 quarterly reports. In 2023, the company achieved revenue of 1,938 billion yuan, an increase of 36.63%; achieved net profit of 449 million yuan, an increase of 40.32%; and realized net profit of 438 million yuan after deduction, an increase of 44.28% over the previous year.
Among them, in 4Q2023, the company achieved revenue of 574 million yuan, a year-on-year increase of 32.02%; realized net profit of 129 million yuan, an increase of 25.36% over the previous year; and realized net profit of 123 million yuan after deduction, an increase of 21.68% over the previous year. With 2024Q1, the company achieved revenue of 501 million yuan, an increase of 25.12% over the previous year; achieved net profit of 87 million yuan, an increase of 6.62% over the previous year; and realized net profit of 86 million yuan after deduction, an increase of 9.70% over the previous year.
The decline in valine prices dragged down performance, and volume compensation continued to grow rapidly. According to Wind quoted data from Boya Hexun, the price of valine was in a declining range from the second half of '23 until 24Q1. The average price of valine in '23 was 2,816 yuan/ton, down 1.41% year on year; the average price of valine in 24Q1 was 15,499 yuan/ton, down 41.60% year on year and 17.28% month on month. Although the price of valine products declined, corresponding to the overall business performance of amino acid products, the company achieved sales volume of 77,200 tons of amino acid products in '23, an increase of 29.87%; achieved revenue of 1,465 billion yuan, an increase of 25.62%; and achieved a gross profit margin of 43.32%, an increase of 0.95 percentage points over the previous year. Through volume compensation, the company maintained positive growth in revenue and profit margins throughout the year, reflecting the technical, cost and customer resource advantages of the company's main products. Since entering 24Q2, the price of valine has stabilized around 15,000 yuan/ton. With the gradual elimination of negative external factors, the company's performance is expected to continue to maintain a rapid growth trend.
New bio-based products have been successfully put into production, small varieties of amino acids have been relayed, and the product matrix continues to be rich. Within 23 years, the company will advance the Chifeng base with an annual output of 50,000 tons of biobased succinic acid and biobased product raw materials production base project and a biobased 1,3-propanediol construction project with an annual output of 50,000 tons, and the Qinhuangdao base construction project with an annual output of 50,000 tons of bio-based malic acid. In 2024, all of these projects have also achieved continuous mass production, which also means that the company's products and technologies will expand production from amino acids, vitamins and other products to new biobased material monomers, further expanding the new space for the company's business growth. In addition, in 2024, the company will continue to promote the joint implementation and implementation of the Bayannaoer base's “project with an alternating annual output of 60,000 tons of three-chain amino acids, tryptophan, and 10,000 tons of refined amino acids” and the Chifeng base's “biomedical alternating production of 25,000 tons of valine, arginine and 1,000 tons of inositol construction project”. The company's product structure is expected to continue to be rich, and the performance is expected to continue to grow.
Investment advice: The company is a leading synthetic biology company, leading the alanine and valine anaerobic process industry. The three new products and new types of amino acid products are expected to contribute new profit increases. We expect the company to achieve net profit of 657 million yuan, 843 million yuan, and 1,085 million yuan in 2023-2025, EPS of 4.17 yuan, 5.35 yuan, and 6.89 yuan, respectively. PE corresponding to the closing price on April 23 is 25, 20, and 15 times, respectively, maintaining a “recommended” rating.
Risk warning: raw material prices fluctuate, market competition intensified, core technology or core technical personnel lost.