2024Q1 revenue grew steadily year on year. We are optimistic about the company's long-term development and maintain a “buy” rating
The company released its 2024 quarterly report. 2024Q1 achieved revenue of 589 million yuan, +13.74%, and -8.97% month-on-month; net profit to mother of 0.76 million yuan, +26.68%, and +36.46% month-on-month; net profit without return to mother of 50 million yuan, -9.12% year-on-year, -14.53% month-on-month; gross sales margin of 34.10%, -4.01 pcts, and -1.71 pcts month-on-month. The main reasons for the company's profit increase in the first quarter of 2024 were: (1) the company continued to increase its market development efforts; (2) the company's 2024Q1 non-recurring profit and loss increased compared to the same period in 2023. We maintain the company's profit forecast. The net profit for 2024-2026 is estimated to be 4.05/5.06/624 million yuan, the corresponding EPS is 0.83/1.04/1.28 yuan, and the PE corresponding to the current stock price is 22.4/17.9/14.5 times. We are optimistic about the long-term development of the company's comprehensive gas service provider and maintain a “buy” rating.
The on-site gas production and rental business revenue continued to grow. The on-site gas production project achieved a new breakthrough. The company's on-site gas production and rental business achieved revenue of 62 million yuan in 2024Q1, accounting for 10.48% of revenue.
In terms of the project, the company's Xiamen Tianma project and the Wuxi Huarun Shanghua project will generate performance contributions in 2024; the company signed a special contract for the long-term supply of industrial gas with Yingkou Jianfa Shenghai Nonferrous Chemical Co., Ltd. in March 2024, and passed the construction of a new 66,000 Nm. The /h air separation device supplies industrial gas products (oxygen and nitrogen) to customers for a long time by means of pipeline supply. The contract period is 20 years, and the total contract amount is about 2.4 billion yuan (excluding tax), achieving a breakthrough in large-scale on-site gas supply projects.
The company continues to innovate and develop and continuously improve the specialty gas category. Future performance growth is expected. The company will continue to invest in R&D. The 2024Q1 R&D cost was 0.24 million yuan, -2.76% year-on-year, and +19.21% month-on-month; the R&D cost rate reached 4.02%, -0.69pcts year on year, +19.21pcts month-on-month, with obvious month-on-month recovery.
In terms of specialty gas products, high-purity carbon dioxide has been supplied in batches at two storage companies, and tested by TSMC, Xiamen Lianxin, SK Hynix, etc.; ethyl orthosilicate has been supplied in batches in Xiamen Lianxin; 7 new products are being industrialized, including perfluorobutadiene, monofluoromethane, octafluorocyclobutane, dichlorodihydrogen silicon, hexachloroethylene silane, ethsilane, and trimethylsilamine. As the industrialization process of new products accelerates, the company's future performance growth can be expected.
Risk warning: downstream demand falls short of expectations; capacity release falls short of expectations; customer acquisition falls short of expectations.