Core views:
The company announced its 24Q1 financial report, and both revenue and net profit to mother achieved double-digit growth. According to the company's financial report, 2024Q1's revenue was 359 million yuan, a year-on-year change of +10.35%, and net profit to mother was 37 million yuan, a year-on-year change of +15.37%.
Gross profit margin has increased steadily, and operating capacity has improved. According to the company's financial report, the company's gross margin for 2024Q1 was 32.83%, +0.06pct year-on-year. According to the investor relations announcement, gross margin is expected to continue to improve in 2024 as the production capacity of the second phase of the ultra-high molecular polyethylene fiber project gradually climbs and the completion of the intelligent transformation project. The number of inventory turnover days for the 2024Q1 company was 248 days, down 12 days year on year, and the number of accounts receivable turnover days was 47 days, down 8 days year on year.
We are optimistic about the company's 2024 results outlook. Using “high-tech and high-value-added product transformation” as a breakthrough, the company focuses on developing the field of new chemical fiber materials, and continues to promote the construction of new ultra-high molecular weight polyethylene materials and other special new materials and functional high-end fiber industries.
According to the company's investor relations announcement, in the worsted fleece business, the 24Q1 company had sufficient orders, and foreign trade improved significantly compared to 23Q4. The company expects to maintain smooth operation after the technical reform is completed; in the clothing business, the company actively adjusts the product/customer structure and orders are of high quality; in the new materials business, ultra-high molecular polyethylene fiber phase I currently maintains a high capacity utilization rate, and the production capacity of the second phase project is gradually climbing. The nylon project has entered the factory one after another. In addition, the company completed the intelligent transformation project by the end of 2023. 24-year forecast The production and marketing/product structure was upgraded, and subsequent capital expenses were mainly concentrated on the nylon project; in terms of dividends, the company carried out a share repurchase of 60 million yuan in 2023, and continued with a 30% cash dividend ratio. According to the company's investor relations announcement, the company stated that it will continue to maintain a 30% dividend ratio in the future as the company's net profit improves.
Profit forecasting and investment advice. The company's earnings per share for 2024-2026 are expected to be 0.69/0.79/0.92 yuan, respectively. Referring to comparable company valuations, it maintains a reasonable value of 12.61 yuan/share, corresponding to a price-earnings ratio of about 18 times over 24 years, maintaining a “buy” rating.
Risk warning. Risks such as fluctuations in raw material prices, increased market competition, and exchange rate fluctuations.