The company released its 2024 quarterly report: 2024Q1 achieved revenue of 835 million yuan (+6.3% YoY), net profit of 86 million yuan (YoY +10.9%), net profit after deducting non-return to mother of 81 million yuan (+5.5% YoY). The Q1 price base is high, demand continues to be weak, the company's growth resilience is prominent, new materials and overseas business are progressing steadily, and highlights can be found. The average dividend ratio of the company in 2016-2023 was 77.8%, focusing on long-term returns for investors.
Color printing sales grew steadily, and film production contributed to an increase. 1) Color printing: Crude oil prices were high in the same period last year, the average price base of the product was high, and the average price is expected to continue to decline; with the increase in the share of old customers & the introduction of new products, new customers & the continuous expansion of the new circuit, the company's color printing sales continue to grow steadily, and Q1 color printing revenue is expected to remain stable; 2) Film: Benefiting from the commissioning of BOPE/BOPP film, the operation improved quarterly. It is expected that Q1 sales and revenue will increase significantly year-on-year, and profitability will recover steadily.
Think far-sighted and look forward to long-term growth. 1) Going overseas: The company has leading global competitiveness, smooth overseas logistics, and accompanies multinational customers to the global market while strengthening the expansion of new overseas customers. The 2023H2 overseas market has fluctuated slightly and its base has declined. We expect double-digit revenue growth overseas in 24Q1, and is expected to maintain rapid growth throughout 2024; 2) New materials: the share of functional films will gradually increase, and materials such as single materials, degradable, and high barrier materials have excellent innovation capabilities, driving increased profitability & deepening customer bonding.
The industrial layout has been extended in depth, and the results of cost control have been highlighted. 2024Q1 gross margin was 22.1% (-2.4 pct year over year), and net profit margin to mother was 10.4% (+0.4 pct year over year). Judging from the cost performance, the Q1 sales/management/R&D expense ratio was 2.1%/4.5%/4.4%, respectively (-0.1 pct/-0.4 pct/ year-on-year). Profitability is expected to remain stable as raw materials remain stable, the share of high-margin overseas & new materials businesses increases, and the self-sufficiency of raw materials increases further after the release of new film production capacity.
Profit forecast: In 2024-2026, the company's net profit is expected to be 470 million yuan, 530 million yuan, and 60 billion yuan respectively, corresponding to PE of 14.0X, 12.3X, and 10.9X, maintaining the “buy” rating.
Risk warning: Raw material prices fluctuate, downstream demand recovery falls short of expectations, overseas markets fluctuate.