Description of the event
On the evening of August 30, Akoli announced its 2024 semi-annual report. In 2024, the company achieved revenue of 0.242 billion yuan, a year-on-year decrease of 13.30%; net profit to mother was 1.98 million yuan, a year-on-year decrease of 87.75%; net profit not attributable to mother was 0.33 million yuan, a year-on-year decrease of 97.66%. The company achieved revenue of 0.139 billion yuan in the second quarter, +2.37%/+34.79% YoY; net profit to mother of 0.79 million yuan, -92.01%/-33.61% YoY; net profit of 0.21 million yuan after deducting non-return to mother, -97.67%/+75.00% YoY.
The price spread of fatty amines bottomed out, and the 2024 H1 performance continued to be weak
Since 2024, the main business, the polyetheramine industry, production capacity expansion combined with offshore wind power installations has fallen short of expectations, putting pressure on prices and profits; supply and demand for optical materials have stabilized, and prices have stabilized month-on-month. By business segment, 2024H1 has a gross profit margin of 3.04%/22.33% for fatty amines and optical materials. Fatty amine profits declined significantly year-on-year, which is also the main reason for the decline in the company's performance. Judging from Q2 business data, sales of fatty amines were +17%/+54% yoy, respectively, but prices were -18%/-9% yoy. The sales volume of optical materials was +47%/+24% YoY/M, respectively, but prices were -22%/+3% YoY.
Despite the downward pressure on the industry, on the one hand, the company adheres to the sales idea of prioritizing high-end, high-quality customers, and focuses on meeting the needs of high-quality customers, and continues to maintain good cooperative relationships with well-known companies such as Lanco Chemical, Schlumberger, Nippon, PPG, and Daosheng Tianhe; on the other hand, due to the boom in the petroleum and shale gas extraction industry, the company actively expands the North American and European markets. The company's export volume of polyetheramine MA-223 increased slightly year-on-year, and its export volume accounted for 62.22% of total polyetheramine sales, a decrease of 62.22% of the total sales volume of polyetheramine Partial performance pressure.
The industrialization of COC is accelerating. After years of R&D, Arcolis has a first-mover advantage, and industrialized installations are progressing smoothly
In the past two years, the COC/COP domestic industrialization process has accelerated. On the one hand, some domestic enterprises have achieved certain industrialization breakthroughs after years of research and development; on the other hand, downstream industrial chains such as consumer electronics and new energy vehicles in the field of optics have clearly moved to the country. The problem of this material is becoming more prominent due to concerns about supply chain safety, and downstream manufacturers' willingness to replace domestic production has strengthened, thus speeding up the upstream and downstream industrialization development process. Currently, the price of this material is still too high in many fields, positioning the product in high-end applications. We believe that the main bottleneck in the market is still on the supply side.
According to the 2024 semi-annual report, in the first half of 2024, high-transmittance cyclic olefin monomers have been mass-produced and sold in small quantities. A kiloton production line for high light transmittance materials (cyclic olefin copolymer COC) has been built. The company is actively communicating with relevant departments to handle trial production approval procedures for highly transparent materials (cyclic olefin copolymers COC) to ensure that the new production line can meet regulatory requirements after being put into trial production. The company's sales department actively contacts downstream related enterprises and establishes initial contacts. Once mass production is carried out, samples will be tested with downstream customers to obtain customer certification and orders as soon as possible. At the same time, with COC materials, the company has entered the Ministry of Industry and Information Technology's Biomedical Materials Innovation Task Leader (first batch) list of shortlisted companies. The company has been exploring R&D for a long time, and progress is currently at the forefront of the industrial chain.
Investment advice
Due to the decline in demand and prices in the main business exceeding expectations, we lowered our previous profit forecast. We expect Akoli's net profit to be 0.022 billion yuan, 0.107 billion yuan, and 0.221 billion yuan (original value 0.04 billion yuan, 0.166 billion yuan, 0.281 billion yuan), and the corresponding PE is 147.40X/29.73X/14.45X.
In view of the expectations of the company's high growth rate of future performance, the “gain” rating was maintained.
Risk warning
The production capacity of the Hubei Qianjiang project fell short of expectations;
Competition in the polyetheramine and highly translucent materials industry is intensifying;
The promotion of highly translucent materials fell short of expectations;
The installation of wind power fell short of expectations.