Net profit after deduction in 2023 increased 186.14% year over year. Net profit after deduction in 2023 increased 186.14% year over year. In 2023, the company achieved operating income of 3.244 billion yuan, a year-on-year increase of 13.60%, net profit of 259 million yuan, an increase of 114.08% over the previous year, and net profit after deduction of 240 million yuan, an increase of 186.14% over the previous year. The increase in the company's performance was mainly due to a sharp increase in phosphate ore production and revenue. In 2023, the company produced about 510,000 tons of phosphate ore, with sales revenue of 389 million yuan, an increase of 374.8% over the previous year. The company plans to pay a dividend of 1.50 yuan (tax included) for every 10 shares in 2023. The total cash dividend is about 133 million yuan, and the dividend payment rate is 51.44%. With 2024Q1, the company achieved operating income of 656 million yuan, a year-on-month decrease of 9.92%, a year-on-year decrease of 17.28%, a year-on-year net profit of 52.759 million yuan, a year-on-year decrease of 22.73%, a year-on-year decrease of 26.57%, and net profit after deduction of 52.156 million yuan, a year-on-month decrease of 31.54% and a year-on-year increase of 9.34%.
The production capacity of the Xiaogaozhai phosphate mine increased to 2 million tons, driving future performance growth. In 2023, the company's phosphate ore design capacity was 900,000 tons, and the capacity utilization rate was 56.21%. According to the company's announcement, the company's Xiaogaozhai phosphate mine is currently under construction. The construction scale was increased from 900,000 tons/year to 2 million tons/year. Currently, the company is finishing 2 million tons of construction. The daily production of engineering mines during the construction process has increased to a certain extent. The next stage of the Xiaogaozhai phosphate mine will enter trial production, inspection and formal production.
The new materials project is progressing steadily. The company uses high-quality phosphate ore resources in Guizhou as the starting point to open up the upstream and downstream industrial chains, promote the serial development of high-end high-value phosphorus-nitric compounds, expand the construction of high-end chemical raw materials production projects such as high-purity phosphate, electronic-grade nitric acid, and purified phosphoric acid, and extend the construction of high-end new energy materials production projects for iron phosphate and lithium iron phosphate, expanding the company's main business to the field of new energy sources. In terms of iron phosphate products, the company has completed production line construction and put into production products, and lithium iron phosphate is progressing normally according to the plan. In terms of phosphoric acid products, the company invested in the construction of the “Nitric Acid Method for High-Purity Phosphoric Acid Production Project”. The project includes 150,000 tons/year of high-purity phosphoric acid, 360,000 tons/year of nitric acid, 426,000 tons/year of calcium ammonium nitrate and by-products. The total planned investment of the project is 1,718 billion yuan, and the construction period is 24 months.
Profit forecasting and investment ratings. We expect the company's net profit for 2024-2026 to be 450, 6.03 and 712 million yuan, respectively, and the corresponding EPS is 0.51, 0.68, and 0.80 yuan/share, respectively. Combined with comparable company valuations, we gave the company 15-17 times PE in 2024, with a corresponding reasonable value range of 7.65-8.67 yuan (corresponding PB of 2.40-2.72 times), giving the first coverage a “superior to market” rating.
Risk warning. Prices of raw materials fluctuated, downstream demand fell short of expectations, and the progress of new projects fell short of expectations.