康泰业绩对赌完成，二期项目逐步释放产能，第二成长曲线加速贡献业绩。根据公司公告，2023 年康泰子公司正式完成2021-2023 三年业绩对赌，承诺业绩1.695 亿元，实际实现业绩1.75 亿元，完成率103.2%。康泰目前拥有产能合计13.3 万吨/年，其中单剂合计10.3 万吨/年，复合剂产能3 万吨/年，二期5万吨/年项目自节后开始放量，贡献利润增量。随新增产能的释放，公司有望弥补之前单剂品类不足的短板，叠加逆全球化趋势带来的全球润滑油添加剂供应链重构，公司润滑油添加剂业务规模及盈利有望同步提升。Key points of investment:
Company announcement: The company released its report for the first quarter of 2024. During the reporting period, the company achieved revenue of 1,354 million yuan (YoY +14.17%, QoQ -4.71%), net profit of 107 million yuan (YoY +29.19%, QoQ +33.75%), and net profit after deducting non-return to mother of 99 million yuan (YoY +23.56%, QoQ +33.78%). The performance was basically in line with expectations. The company's business boom gradually bottomed out, with an overall gross sales margin of 21.38% in 24Q1, up 2.35 pct year on month; in terms of expenses, with the expansion of business volume, expenses increased year-on-year, but remained basically the same. Among them, sales, management, and R&D expenses increased 666, 1128, and 2.81 million yuan year-on-year respectively, with changes of +324, +1009, and -33.6 million yuan, respectively.
The antioxidant industry continued to fluctuate, light stabilizers bottomed out and picked up, and the company's performance gradually bottomed out. In recent years, the bottom of the product boom has continued to fluctuate due to the industry's many new production capacity, compounded by weak global demand, and increased short-term competitive pressure. However, with advantages such as product quality, channel, and innovation, the company continued to expand production and sales scale. According to the company announcement, the first phase of the Zhuhai base's 60,000 tons/year antioxidant, 5,500 tons/year light stabilizer at the Inner Mongolia base, and the 3200 tons/year light stabilizer device at the Hengshui base gradually reached production. The subsequent 30,000 tons/year production expansion plan in Zhuhai is expected to be put into operation in July 2024, supporting the company's revenue to increase 14% year over year. However, due to the impact of the Spring Festival holiday in the first quarter, revenue was slightly pressured. Looking ahead, the new production capacity in the antioxidant industry has not yet been fully released, and the boom may fluctuate; production capacity is disrupted by the light stabilizer industry, and the margin between supply and demand is expected to continue to improve, and the bottom of the economy is gradually picking up. The company currently has a production capacity of about 36,000 tons of light stabilizers (HALS+UVA), which is expected to benefit first.
Kangtai's performance was completed, the second phase of the project gradually released production capacity, and the second growth curve contributed to the performance at an accelerated pace. According to the company's announcement, Kangtai's subsidiary officially completed the 2021-2023 three-year performance gamble in 2023, promised performance of 169.5 million yuan, and actually achieved performance of 175 million yuan, with a completion rate of 103.2%. Kangtai currently has a total production capacity of 133,000 tons/year, with a total production capacity of 103,000 tons/year for single agents and 30,000 tons/year for compound agents. The second phase of the 50,000 tons/year project began to be released after the holidays, contributing to increased profits. With the release of new production capacity, the company is expected to make up for the shortcomings of the previous shortage of single agent categories, compounded by the restructuring of the global lubricant additive supply chain brought about by the anti-globalization trend. The scale and profit of the company's lubricant additives business are expected to increase simultaneously.
The third growth curve is beginning to show scale, adding the electronic grade PI materials business, and opening a new growth pole. The company's third growth curve life science division includes the biological block industry with Orif and Olive as carriers and the synthetic biology industry with the synthetic biology research institute as the core. 23Q1 successfully achieved trial production in a 6-ton nucleic acid monomer pilot plant. Q4 received the first batch of orders, and the third growth curve began to show scale. At the same time, the company plans to increase capital to Yixing Chuangju with free capital of 200 million yuan. After the capital increase is completed, it will hold 51.1838% of Yixing Chuangju's shares, adding electronic grade PI materials business to the company. The remaining capital increase will be used by Yixing Chuangju to build a YPI production line and TPI coating line to support the company's gradual expansion into the upstream core materials industry for the manufacture and use of flexible OLED display screens and flexible circuit boards (FPCs), chip packaging, and power batteries, which is expected to open up a new growth curve for the company.
Profit forecast and valuation: Due to disruptions in production capacity and continuous improvement in marginal supply and demand from our peers, we have raised our 2024-2026 profit forecast to achieve net profit of 5.99, 7.13, and 839 million yuan (495, 5.97 million yuan, and 708 million yuan before adjustment, respectively), and the corresponding PE valuations are 12X, 10X, and 9X, respectively, maintaining the “gain” rating.
Risk warning: 1) Raw material prices fluctuate greatly; 2) Downstream demand falls short of expectations.
