Net profit after deduction in 2023 increased 520.76% year-on-year, and the company plans to distribute cash dividends of about 631 million yuan. The company achieved operating income of 17.374 billion yuan in 2023, down 0.64% year on year, net profit to mother of 678 million yuan, up 11.45% year on year, net profit after deducting 727 million yuan, up 520.76% year on year. The sharp year-on-year increase in the company's net profit after deduction is mainly due to the fact that the company included Yipin Biotech in the scope of the merger in November 2022. Since the net profit and loss of the subsidiaries from the beginning of the period to the date of consolidation due to the merger of enterprises under the same control was non-recurring profit and loss, the net profit after deduction in 2023 increased significantly year-on-year. 2023Q4, the company's revenue was 4.645 billion yuan, up 4.10% from the previous month, up 0.67% year on year, net profit to mother was 189 million yuan, down 27.27% month on month, up 74.36% year on year, net profit after deducting 260 million yuan, up 11.38% month on month, up 1731.41% year on year. The company plans to distribute a cash dividend of 3.80 yuan per share (tax included) for every 10 shares. The total cash dividend distribution is 631 million yuan, accounting for 93.13% of net profit due to mother in 2023.
Net profit after deducting 2024Q1 increased 110.94% year over year, benefiting from lower raw material prices. In the first quarter of 2024, the company achieved operating income of about 4.2 billion yuan, a year-on-month decrease of 9.59%, a year-on-year increase of 0.87%, a net profit of 251 million yuan, a year-on-year increase of 33.38%, a year-on-year increase of 108.66%, after deducting net profit of 254 million yuan, a year-on-month decrease of 2.07% and a year-on-year increase of 110.94%. The main reason for the change in the company's revenue was the year-on-year decline in sales prices of the company's main products in 24Q1, but the year-on-year increase in sales volume of major products made up for the impact on sales revenue due to the year-on-year decline in sales prices. The main reason for the sharp increase in the company's net profit to mother was the year-on-year increase in sales of major products in 24Q1, and the price of the main raw materials, corn and coal, which affected the year-on-year increase in gross profit of 149 million yuan.
The company plans to invest in the construction of 600,000 tons of corn deep processing and supporting cogeneration projects. The company plans to invest in the construction of 600,000 tons of corn deep processing and supporting cogeneration projects. The total investment of the project is estimated at RMB 3,712 billion, of which 30% of the capital comes from the company's own funds, and about 70% of the capital comes from bank project loan financing. The specific construction content of the project includes the construction of a 600,000-ton corn deep processing line to produce 115,000 tons/year of various small varieties of amino acids. The main products are: valine, isoleucine, tryptophan, arginine, and ancillary production related by-products; supporting construction of office and production service facilities. The construction of the project is expected to take 2-3 years. Through this project, the company plans to increase the production capacity scale of small varieties of amino acids, enrich the product variety, improve the product structure, and consolidate the company's position in the industry.
Profit forecast. We expect the company's net profit for 2024-2026 to be RMB 1,101, RMB 12.21, and RMB 1,354, respectively, and the corresponding EPS of RMB 0.66, 0.73, and 0.81 yuan, respectively. Referring to the valuation of comparable companies in the same industry, PE was given 12 times in 24 years, corresponding to a target price of 7.92 yuan, maintaining a rating superior to the market.
Risk warning. Product prices fluctuated, and downstream demand fell short of expectations.