公司披露2023 年年报与2024 年一季报Core views
The company's overall performance in '23 was under pressure, but 23H2 recovered significantly from month to month. Thanks to the company's active transformation and gradual withdrawal from production of a large variety of water reducing agent products, the company's performance was repaired. 23H2 revenue was +11.2% month-on-month, net profit to mother +16.2% month-on-month, 24Q1 revenue +8.9% month-on-month, and net profit to mother -2.4% month-on-month. The company is currently actively developing small-variety products with high added value and high demand, with a gross profit margin of 24.6% for 23 years, +1.2pct compared to the previous year. The company is in a leading position in specialty surfactants, accelerating the cultivation of new application sectors such as high-end electronic chemicals and new functional resins. The company's “Third Factory” project is being actively promoted, and the production capacity is expected to reach 600,000 tons after full production is put into operation, which will help the company to better explore the downstream customer market.
occurrences
Company Discloses 2023 Annual Report and 2024 Quarterly Report
The company achieved revenue of 1.89 billion yuan in 2023, a year-on-year decrease of 13.21%; net profit to mother was 325 million yuan, a year-on-year decrease of 31.94%; net profit after deduction was 295 million yuan, a year-on-year decrease of 7.90%.
The company achieved operating income of 532 million yuan in 24Q1, up 23.1% year on year, up 8.90% month on month, net profit of 88 million yuan, up 11.5% year on year, down 2.37% month on month, after deducting net profit of 81 million yuan, up 37.4% year on year and 7.72% month on month.
Brief review
23H2's active transformation paid off, 24Q1 revenue grew year on month
The company's 23H2 achieved operating income of 997 million yuan, +4.8% YoY, +11.2% month-on-month, net profit of 175 million yuan, -3.3% YoY, +16.2% month-on-month, net profit of 171 million yuan after deducting net income from mother, +48.5% YoY and +37.7% month-on-month. Affected by macroeconomics and industry influence, the company's 23H1 performance was under pressure and actively withdrew from the production of large-scale water reducing agent products, and actively developed small-variety businesses such as specialty surfactants and new energy rubber resins. It has now begun to bear fruit. In '23, the company's large and small variety sector output was 0.68/133,000 tons, respectively, -83.5%/8.81% year-on-year, with sales volume of 0.882/133,000 tons, respectively, -79.7%/+10.0% year-on-year; the large and small variety segments achieved revenue of 0.581.83 billion yuan, respectively -82.5%/-0.87% year-on-year, with gross margins of 4.61%/25.2%, respectively. Thanks to the company's active transformation, the company's profitability has improved. The overall gross margin for 23 was 24.6%, +1.2pct compared to the previous year.
The company's expense ratio for the 2023 period was 7.25%, of which the sales/management/R&D/finance rates were 0.46%/2.94%/3.88%/-0.03%, respectively, with year-on-year changes of -0.01/-0.38/-1.43/+1.09pct. The reduction in the R&D expense ratio was due to a decrease in direct investment in '23, an increase in financial expenses, an increase in interest expenses, and a decrease in exchange profit and loss.
After entering 24 years, the company continued to develop in the small variety sector. 24Q1 special functional and polymer surfactant products produced 40,900 tons, with sales volume 40,400 tons, of which strategic emerging sectors (high-end functional electronic chemicals sector and functional new material resin sector) sold 10,600 tons, and the average price of specialty surfactants was 13,300 yuan/ton, or -1.96% over the same period last year. The average price of raw materials ethylene oxide was 0.57 million yuan/ton, -0.82% year on year, and the average price of propane oxide was 0.81 million yuan/ton, -8.44% year on year.
The market for specialty surfactants and high-end new materials is broad, and there is still room for growth in the future. There is still room for growth. The company is a leading specialty surfactant enterprise with large production scale, complete variety, and high technological content in China. The main product, nonionic surfactants, is currently the largest variety of surfactants in China, and the company's production capacity is nearly 300,000 tons/year. The company has significantly improved its performance by developing small varieties, and has successfully cultivated new profit growth points such as new adhesive materials, resins, lubricants, and metalworking fluids. In the future, the company will focus on the small variety sector and continue to upgrade the product structure, which is expected to drive an increase in profit levels.
Actively promote the new plant to ensure future growth capacity
The company currently has two major production bases, Lukean and Real Madrid Shangyi, with a production capacity of nearly 300,000 tons of specialty surfactants. In addition, the company is also actively increasing production and capacity. Real Madrid Shangyi began gradually putting into operation some of its 30,000 tons/year production line in H2 in '23. Lukean withdrew from the production of a large variety of water-reducing agent products in H1 in '23, and was used for production of other products through technical reforms. In addition, the company's “Third Factory” Real Madrid Kaimeike project with an annual output of 330,000 tons of high-end functional new materials is also progressing steadily. The first phase of production capacity of 168,500 tons is expected to be implemented in 25 years. After the full production capacity is implemented, the company's total production capacity is expected to reach 600,000 tons, helping the company make full use of its product advantages.
Profit Forecast and Valuation:
We expect the company's net profit to be 3.78, 4.49, and 548 million yuan respectively for 2024-2026, and EPS of 0.64, 0.76, and 0.93 yuan respectively, maintaining a “buy” rating.
Risk warning: Macroeconomic recovery falls short of expectations, resulting in company demand recovery falling short of expectations (the company has many types of products, and downstream terminals are scattered, such as insufficient demand in the terminal industry due to macroeconomic recovery, which may drag down the company's revenue and profit growth); production and capacity expansion fall short of expectations (if an unexpected situation causes the start of the company's “third factory” project to be delayed, it may affect the company's performance); market competition intensifies (for example, the company's polyetheramine product market supply increases a lot, and there is a risk of a decline in profits); primary raw materials (the company mainly has a risk of declining profits) (The raw materials ethylene oxide and propane oxide are basic chemicals. If the product price soars in the short term, it may affect the company's gross margin level).