The company achieved operating income of 4.982 billion yuan in 2023, an increase of 18.98% over the previous year; net profit after deduction was 742 million yuan, an increase of 23.07% over the previous year. Achieving a basic EPS is 1.17 yuan. In the first quarter of 2024, we achieved operating income of 1,267 billion yuan, an increase of 2.50% year on year, and net profit after deducting net income of 210 million yuan, an increase of 36.14% year on year.
Comment:
Product structure optimization promotes continued high profit growth. The company's net profit after deduction in the first quarter of 2023 and 2024 maintained a high growth rate, and the year-on-year growth rate increased quarterly, mainly due to the increase in sales of the company's borosilicate molded bottles. The company put into operation a borosilicate molded bottle kiln in November 2023 to provide a production capacity base. The launch of the eighth and ninth batches led to an increase in sales of borosilicate molded bottles. In 2023, the company's molded bottle sales increased by 23.65% year-on-year. The proportion of borosilicate molded bottles in pillar products has been increased, and the company's product structure has been further optimized. The revenue growth rate of the molded bottle series in 2023 was 29.36%, the highest revenue growth rate of any product. Although raw material prices were high in 2023, the increase in the share of borosilicate bottles among high-margin pillar products ensured that the company's overall gross margin remained stable at a high level of 28.03% and 30.59% in the first quarter of 2023 and 2024, respectively. The company's 2022 fund-raising project is to build a production capacity of 4 billion first-class water-resistant glass bottles. In 2024, production capacity will be further released along with the company's borosilicate molded bottle fund-raising project. Combined, the prices of raw materials such as soda ash and coal have returned to a lower level, which will help reduce the overall cost of the company's products, and the company's profit growth will maintain a steady and high trend.
The 2024 scale advantage, intelligent production and new product development helped the company reduce costs, enhance customer stickiness, and enhance market competitiveness. As the absolute leader in borosilicate molded bottles, the cost advantage of scale will gradually increase as production capacity is released. At the same time, the company's R&D helped reduce the company's costs. In 2023, the company developed 591 new products, an increase of 170% over last year. The lightweight molded bottles developed further reduced the production cost of borosilicate molded bottles. In addition, the company's production automation is also continuing to advance, with automatic palletizing, automatic tray packaging lines, etc., to reduce labor costs. With the advancement of intelligent chemical plant construction such as informatization of the entire product manufacturing process and big data management, the company will further improve production efficiency, improve equipment utilization, reduce labor, etc., to achieve the goal of reducing costs and increasing efficiency. The company not only relies on scale advantages to better meet customers' timely and large-scale supply needs, but also has different types, complete product lines, and continuous research and development to meet the different needs of customers, provide customers with timely and stable supply, and enhance customer stickiness. Reduced costs and increased customer stickiness will further stabilize the company's leading position and enhance the company's market competitiveness.
Profit forecast and investment rating: The company's net profit for 2024-2026 is estimated to be RMB 1,021, 12.57 and RMB 1,555, respectively. The corresponding EPS is 1.54, 1.89 and 2.34 yuan, and the corresponding PE values are 18.52, 15.03 and 12.16 times, respectively. The company gradually reduces production costs through scale, new product development and intelligent production, enhances customer stickiness, continues to improve its competitiveness as a pharmaceutical glass faucet market, and maintains the company's “highly recommended” rating.
Risk warning: Changes in raw material prices have fallen short of expectations, medium borosilicate production capacity has fallen short of expectations, and changes in the molded bottle market pattern have exceeded expectations.