The net profit for the year 23 was 170 million yuan, which was downgraded to the “increase in holdings” rating. In 2023, it achieved revenue of 1.14 billion yuan (yoy -18%), net profit to mother of 170 million yuan (yoy -36%), and deducted non-net profit of 150 million yuan (yoy -39%).
Of this, 23Q4's net profit was RMB 0.1 billion (yoy -74%, Qoq -72%). 24Q1 revenue was 300 million yuan, +31% year on year, and net profit to mother was 0.3 billion yuan, -50% year over year. The company plans to pay a cash dividend of 1.3 yuan per share (tax included). We expect the company's net profit to be 2.23/287/347 million yuan in 24-26 years, and the corresponding EPS is 2.07/2.66/3.22 yuan. Comparatively, the company's 24-year average Wind consistently expected 20xPE, giving the company 20xPE in 24 years, with a target price of 41.40 yuan, downgraded to an “gain” rating.
Demand for container coatings declined in stages. The annual comprehensive gross margin yoy-1.4pct to 30.3% for container coatings was affected by the decline in the container industry, with sales yoy -17% to 36,000 tons, revenue yoy -38% to 580 million yuan, gross margin yoy-11.9pct to 17.0%; in terms of wind power coatings, benefiting from a significant year-on-year increase in installed capacity in the wind power industry, the company's sales volume yoy +54% to 12,000 tons, revenue yoy +27% to 5.1 billion yuan, gross margin yoy+6.3 pct Up to 46.4%; in terms of other industrial coatings, sales yoy +6% to 30,000 tons, revenue yoy +0% to 50 million yuan, gross margin yoy+5.8pct to 20.9%. The annual comprehensive gross margin yoy-1.4pct to 30.3%, and the periodical expense ratio yoy+0.8pct to 13.0%. 23Q4 comprehensive gross margin was -12.7/-7.3pct to 21.9%, and the period expense ratio was -3.2/+1.7pct YoY to 14.2%.
The average price of the main products in 24Q1 fell. The overall gross margin was -16.9/-1.6pct to 20.4% year-on-month. In terms of container coatings, the average price of 24Q1 YOY -24% to 15,000 yuan/ton, revenue was 220 million yuan, and sales volume was 15,000 tons; in terms of wind power coatings, the average price YOY -24% was 36,000 yuan/ton, with revenue of 20,000 tons; in terms of other industrial coatings, the average price yoy +9% to 19,000 yuan/ton, revenue was 0.1 million yuan/ton At 100 million yuan, sales volume was 294 tons. The 24Q1 comprehensive gross margin was -16.9/-1.6pct to 20.4%, and the period expense ratio was -3.5/-5.0pct to 9.2% month-on-month.
Investment projects are progressing in an orderly manner, and it is expected that the company's performance will increase one after another
According to the 23rd annual report, in March 2023, the company and Sinoma Technology, Wuhan University of Technology, and Beijing FRP Composite Materials Co., Ltd. jointly applied for the “Research and Industrialization of Key Technologies for Low-LCOE Large Wind Turbines” project, which obtained the China Building Materials Federation's “Project Results Reach the International Advanced Level” review and assessment conclusion; in August 2023, in the “Key Technology and Engineering for High-Efficiency Manufacturing of High-Performance Large-scale Composite Wind Turbines” project, the company won the second prize for scientific and technological progress in Jiangxi Province. Furthermore, in late 2023, the company started construction of the Zhuhai project. Also, according to the company's announcement, the company recently entered the classification society sampling and certification stage for marine coatings, which will help the company develop the shipping market in the future.
Risk warning: downstream demand falls short of expectations; progress of new projects falls short of expectations; raw material prices fluctuate.