Incident (1) The company released its 2023 annual report, achieving total revenue of 2,597 million yuan, -3.23%; net profit to mother of 253 million yuan, -23.27% year over year; deducted non-attributable mother 240 million yuan, or -21.59% year over year.
Among them, the fourth quarter achieved revenue of 693 million yuan, +4.40% year on year; net profit of 48 million yuan, or -40.44% year over year; and deducted non-return of 0.45 million yuan, or -40.54% year over year. (2) The company released its 2024 quarterly report, achieving revenue of 744 million yuan, +12.35%, and month-on-month +7.29%; net profit to mother of 0.76 million yuan, -2.83% year-on-year, +57.59% month-on-month; withheld from mother 73 million yuan, -3.85% YoY and +60.52% month-on-month. (3) The company issued a profit distribution plan and plans to distribute a cash dividend of 0.45 yuan per share. The performance was in line with expectations.
Profits in the company's fatty amine sector declined in 2023, and the new energy business grew rapidly. In 2023, the aliphatic amine business segment was affected by weak downstream market demand and the shutdown of equipment upgrades, and the profit level declined. Extractants and new extraction methods independently developed by companies in the field of new energy continue to gain strength in salt lake lithium extraction and lithium recycling business sectors, becoming the fastest growing business sector. Throughout the year, the company sold 101,000 tons of fatty amines, with an average sales price of 12,200 yuan/ton, -8.62%; sold 612,000 tons of organic solvents, +21.37%, with an average sales price of 0.8 million yuan/ton, -7.90%; sold 14,800 tons of synthetic fragrances, +2.34% year over year, average sales price of 35,000 yuan/ton, -2.86% year on year. The average prices of fatty amines, organic solvents, and synthetic fragrances in the first quarter of 2024 were 11,800 yuan/ton, 0.83 million yuan/ton, and 34,300 yuan/ton, respectively, -8.78%, +0.44%, and -5.39% year-on-year respectively.
Project construction progressed steadily, opening up room for the company's subsequent growth. The company and Xingfu Electronics reached a joint venture agreement for the electronic grade isopropyl alcohol project. Isopropanol expanded into the electronic grade high-end field, further improving product profitability. The third phase of Jiangsu Xinrui completed the EIA approval, and the first phase of Ningxia Spice completed the set tasks and goals, and achieved gradual commissioning. The company's lithium extraction project was gradually implemented, and the extractive lithium mother liquor industrial test project signed with Salt Lake Co., Ltd. and Lanke Lithium was successfully put into operation in July 2023; in the field of lithium battery recycling, the company cooperated with Jiangsu Yaoning New Energy Co., Ltd. to build a phase 1 10,000 tons/year waste lithium recycling production line, and successfully applied the extractant to Grimmie battery recycling production line.
Maintain an “Overweight” rating. We expect the company's revenue for 2024-2026 to be 32.39/37.22/4.269 billion yuan, and the net profit to mother for 2024-2026 is estimated to be 3.52/4.55/ 545 million yuan, and the corresponding PE is 15X/12X/10X. Risk warning for maintaining the “gain” rating: downstream demand falls short of expectations, sharp drop in product prices, etc.