On April 26, the company released its 2024 quarterly report. Q1 achieved operating income of 1.48 billion yuan, -6% year-on-month, and 19% month-on-month, and achieved net profit of 51.44 million yuan, -65% year-on-year and +23% month-on-month, and realized net profit without deduction of 5.66 million yuan, -81% year-on-year and -90% month-on-month. Non-recurring gains and losses are mainly government grants.
Device maintenance affects the release of performance. Some of the company's installations were parked and repaired in the first quarter. Among them, the EVA device was parked for 6 days, the EO device was stopped for 12 days due to catalyst replacement, and the EOD device was stopped simultaneously, which affected product production to a certain extent. At the same time, management expenses also increased year-on-year, affecting the company's performance release. Currently, all of the above devices have resumed normal production.
Profitability has improved significantly, with self-supply of raw materials+rising prices driving EVA's profit recovery. The Q1 company's gross sales margin improved significantly. Compared with the 23Q4 restoration of 3.7 PCT to 16.29% month-on-month, we expect it to be mainly driven by high-profit EVA products: Q1 PV module production schedule increased significantly, driving demand for photovoltaic film and EVA, and the price of PV EVA rebounded from 11,500 to 13,500 yuan/ton; in addition, the company's 90,000-ton ethylene acetate plant successfully operated in January and continued to operate at full load. The EVA device achieved complete self-supply of raw materials, driven by price and cost, to estimate Q1's EVA products Improved gross margin. Supported by PV demand, module production schedules remained high in April-May. EVA prices remained at 13,500 yuan/ton in April, and Q2's EVA price and profit are expected to continue to recover. Looking ahead to the whole year, with economic support, module demand is expected to maintain a 30% increase in PV EVA demand in '24, but only 250,000 tons of EVA energy were added in '24. Considering factors such as rising plant production, the company's PV EVA product profit is expected to remain at a high level in '24.
New construction projects are progressing steadily, and a new materials platform is being built to support continued growth in performance. The company is actively promoting the construction of a new material platform. The new construction project progressed steadily according to the plan. The 20,000 tons/year ultra-high molecular weight polyethylene plant was put into trial operation at the end of March. It is expected that 40,000 tons/year PLA, 10,000 tons/year electronic special gas, and 4,000 tons/year lithium battery additives will be put into operation one after another during the year, further increasing the company's high-margin product category and enhancing the company's profitability.
In addition, the first phase of the company's 100,000 ton POE unit and 200,000 ton EVA plant is expected to be completed and put into operation in 2025. In 2025, the company will have 350,000 tons of EVA and 100,000 tons of POE production capacity, comprehensively enhancing competitiveness in the photovoltaic field and supporting continued growth in performance.
According to our latest forecast on product prices, the company's 2024-2026 profit forecast was adjusted to 4.8 (-13%), 5.9 (-13%), and 1.01 billion yuan. Considering the growth brought about by the company's new materials platform, the “buy” rating was maintained.
Risk warning
Product prices fall short of expectations; production expansion project construction and new product development fall short of expectations