Focus on the development and production of acid anhydrides and acid anhydride derivatives. The company was founded in 2002 and listed on A-shares in 2015.
The company specializes in the development and production of acid anhydrides and acid anhydride derivatives. The products are widely used in many fields such as electronic component packaging materials, electrical equipment insulation materials, coatings, composites, etc., and the products are exported to many countries and regions such as Europe, America, and Southeast Asia. In 2023, the company's maleic anhydride derivatives, functional materials, and other main businesses contributed 9.9/23/150 million yuan in revenue respectively, accounting for 72%/17%/11%. In 2023, the company contributed 29% of revenue overseas and contributed 33% of gross profit.
The Fujian Gulei project is about to be put into operation. By the end of 2023, the company had a production capacity of 71,000 tons of maleic anhydride anhydride derivatives and a production capacity of 50,000 tons under construction. The 50,000 ton production capacity under construction is located in Gulei, Fujian. It is scheduled to be put into operation in mid-2024. It is expected that low-cost transportation will expand the company's competitive advantage.
Major product volume increases and decreases in 2023. The company achieved revenue of 1,379 billion yuan in 2023, a year-on-year decrease of 13.63%; net profit to mother of 235 million yuan, a year-on-year decrease of 44.32%; gross sales margin of 26.1%, a year-on-year decrease of 9.9pct; net sales profit margin of 17.0%, a year-on-year decrease of 9.4pct; the decline in revenue and profit margin was mainly due to falling product prices. In 2023, the company sold 82,200 tons of maleic anhydride derivatives, an increase of 21.69% over the previous year. In terms of unit price, maleic anhydride derivatives averaged 12,100 yuan/ton in 2023, a year-on-year decrease of 33.2%. 2024Q1 achieved operating income of 354 million yuan, up 1% year on year; realized net profit of 55 million yuan, down 22% year on year and 57% month on month.
It may benefit from rising prices of tetrahydrophthalic anhydride. Shandong Qingyang New Materials, a wholly-owned subsidiary of the company, specializes in products such as methyltetrahydrophthalic anhydride, methylhexahydrophthalic anhydride, and C5 mixtures. It built an expansion project with an annual production capacity of 20,000 tons of methyltetrahydrophthalic anhydride in 2022, and achieved revenue of 260 million yuan and net profit of 0.3 billion yuan in 2023. According to data from the customs statistics platform, in 2023, China's total export volume of tetrahydrophthalic anhydride was 4,456 tons; in April 2024, China's export unit price of tetrahydrophthalic anhydride rose sharply to 7.1 USD/kg, an increase of 222% year-on-year and 273% month-on-month.
The functional materials business has broad long-term space. The company produces OLED-related functional material intermediate products, and has established a competitive advantage in chemical synthesis and purification; the share of OLED displays in the field of small-size displays has gradually increased in recent years, and the scale of downstream OLED panel production has also continued to grow. The company's functional materials business achieved revenue of 230 million yuan in 2023, an increase of 9% year on year, gross profit margin of 45.9%, and an increase of 10.5 pct year on year.
Covered for the first time, a “gain” rating was given. Revenue from 2024 to 2026 is expected to be 16.19/2.3 billion yuan, up 16%/21%/17% year on year, and net profit to mother will be 3.0/3.6/420 million yuan, up 27%/20%/17% year on year, corresponding PE 16/13/11 times.
Risk warning: New project production and sales fall short of expectations, raw material prices fluctuate, and performance falls short of expectations