Incident: The company released its 2023 annual report and quarterly report for 2014. In 2023, it achieved revenue of 4.369 billion yuan, +14.86% year-on-year, and realized net profit of 184 million yuan, or -38.81% year-on-year. Among them, Q4 achieved revenue of 1,140 million yuan, +5.23%/-0.81% YoY; realized net profit to mother of 0.22 million yuan, or -70.12%/-58.44% YoY. 24Q1 achieved revenue of 1,012 million yuan, +7.84%/-11.17% YoY, and realized net profit of 37 million yuan, or +27.38%/+72.11% YoY. In fiscal year 23, the company plans to distribute a cash dividend of 1.50 yuan (tax included) to all shareholders for every 10 shares, with a cash dividend ratio of 31.05%.
In 23 non-quota years, the refrigerant industry was weak, and the economy declined due to the mismatch between polymer supply and demand. The company's revenue growth sector mainly relied on the release of polymer production capacity. Revenue of fluorocarbon chemicals/fluoropolymer materials/chemical raw materials in '23 was -3.75%/+58.66%/+33.11%, gross profit margin 7.75%/23.9%/6.79%, year-on-year, -1.63/ -13.62/ -13.96 pcts. 24Q1's refrigerant prices increased month-on-month, but production/sales declined month-on-month. According to the company's disclosure, 24Q1 fluorocarbon chemical production was 42,700 tons, -14%/-13% month-on-month; sales volume was 20,300 tons, -17%/-27% month-on-month; calculated sales price was 23,300 yuan/ton, +8%/+5% month-on-month. Q2 is the peak season for domestic and foreign trade in refrigerants, and prices and price differences continue to rise. According to Baichuan data, the average price of Q1 R32/R125/R134a was 2.23/3.74/30,900 yuan/ton, +34%/+41%/+15% month-on-month. As of April 25, the average price for Q2 was 2.96/4.44/32,000 yuan/ton, +32%/+4% month-on-month.
Due to the expansion of production capacity and weak demand, the profits of the fluoropolymer materials industry continue to be under pressure. According to Baichuan data, the average price of 23Q4-24Q1 FEP (East China molding material) was 10.35/82,300 yuan/ton, -2.34%/-20.51% month-on-month; as of April 26, the average price of 24Q2 FEP was 75,000 yuan/ton, -8.85% month-on-month.
The average price of 23Q4-24Q1 HFP was 3.75/36,500 yuan/ton, -0.84%/-2.66%; as of April 26, the average price of 24Q2 HFP was 36,500 yuan/ton, -0.05% month-on-month.
Investment advice: The price increase of 24Q1's refrigerant varieties is slightly lower than the market. The fluoropolymer industry is under pressure, and the 24-year performance forecast is lowered. Net profit due to mother for 24-26 is estimated to be 5.10/6.88/738 million yuan, corresponding to PE 18.6/13.8/12.9 x, maintaining the “gain” rating.
Risk warning: Demand for refrigerants falls short of expectations, changes in industry policies, and production capacity release falls short of expectations.