2024 revenue and profit increased year over year. On April 25, 2024, the company released its report for the first quarter of 2024. In the first quarter of 2024, the company achieved operating income of 589 million yuan, an increase of 13.74% over the previous year; realized net profit of 76.48 million yuan, an increase of 26.68% over the previous year; and realized net profit of 50.18 million yuan after deduction, a decrease of 9.12% over the previous year. In terms of revenue structure, specialty gas accounts for 44.59%, bulk gas accounts for 35.85%, on-site gas production and rent accounts for 10.48%, and clean gas accounts for 9.08%. The company's gross margin level declined year-on-year in the first quarter of 2024 due to rising argon raw material prices and falling helium market prices. Affected by the company's receipt of government subsidies and increased asset disposal income, the company's net profit to mother increased year-on-year.
Electronic specialty gas products achieve a matrix layout and stabilize the company's position in the electronic gas field. The company currently supplies specialty gas products such as ultra-pure ammonia, high-purity nitrous oxide, high-purity hydrogen, and high-purity helium in batches to well-known semiconductor customers such as SMIC, Hynix, Lianxin Integrated, Jita, China Resources Microelectronics, and Huali Integrated. In terms of superior products, the company has laid out ultra-pure ammonia in Meishan, ultra-pure ammonia in Vietnam, and high-purity nitrous oxide projects in Pingdingshan. Currently, most production capacity has reached trial operation, and the gradual rise in new production capacity will lead to an increase in the company's revenue and profit. In terms of new products, electronic-grade ethyl orthosilicate and high-purity carbon dioxide, which will be put into production in 2023, have also been certified by some first-line customers to achieve small-batch supply; 7 new products, including perfluorobutadiene under construction, are in the process of industrialization. With the orderly launch of the company's electronic specialty gas products and the introduction of certification, the company's market position in the electronic gas field will be further stabilized while continuously optimizing the company's product structure.
China Resources Shanghua Electronics' bulk gas carrier project officially supplied gas, successfully replacing the electronics bulk stock market.
In April 2023, the company successfully won the bid for the bulk gas carrier project of Wuxi China Resources Shanghua Electronics; on April 18, 2024, the company held the “China Resources Microelectronics Wuxi Electronics Bulk Gas Production and Supply Ceremony” and officially mass-produced gas supply to China Resources Shanghua. The winning bid and gas supply for this project marks a major breakthrough in China's gas industry. That is, for the first time, a domestic gas company has achieved a domestic replacement for the electronic bulk gas storage business of mature mass production wafer production lines, and the company will have great potential in the domestic 10 billion electronic bulk gas inventory market.
Risk warning: the risk of falling prices of main products; the risk that the commissioning progress of electronic bulk gas projects falls short of expectations; the risk that the production progress of new electronic special gas products falls short of expectations.
Investment advice: Maintain a “buy” rating. Based on the characteristics of high barriers to electronic specialty gas certification, the company's core products will maintain a competitive advantage for clients for a long period of time, and product profitability is relatively stable. Moreover, with the rolling launch of the company's new products, the company's product structure will continue to be optimized, and there is still room for continuous optimization of gross margin. We maintain our forecast for the company's 2024-2026 net profit of 4.01/497/614 million yuan. The current stock price corresponds to PE at 23/18/15X, respectively, and maintains a “buy” rating.