淡季不淡，业绩创新高。24Q3，公司业绩大幅增长，其主要原因在于：1）巴斯夫事故驱动维生素价格上行。7 月29 日，巴斯夫路德维希港火灾， VA 、VE 装置受不可抗力，驱动维生素A、E 价格一路上行，24Q3 维生素A、E 均价分别为193.05、124.48 元/千克，环比+123.44%、+77.42%；2）海外补库意愿强烈，出口大幅增长。在巴斯夫事故的影响下，海外供给收缩明显，提前备货意愿强烈，造成Q3 维生素A、E 出口量大幅增加，出口量分别为1761 吨、27406 吨，同比+62.65%、+39.37%。维生素销售淡季不淡，公司创历史最高单季度业绩。Matters:
Xinhecheng released a report for the third quarter of 2024. 24Q1-Q3 achieved revenue of 15.782 billion yuan, +43.31% year over year, and realized net profit to mother of 3.99 billion yuan, or +89.87% year over year. Among them, Q3 achieved revenue of 5.937 billion yuan, +65.21%/+11.06% YoY, net profit to mother of 1.785 billion yuan, and +188.87% /+33.75% YoY.
Commentary:
The off-season was not easy, and the performance reached a record high. The main reasons for the sharp increase in the company's performance in 24Q3 are: 1) The BASF accident drove up vitamin prices. On July 29, the BASF Ludwigshafen fire caused the VA and VE devices to suffer force majeure, driving the prices of vitamins A and E all the way up. The average price of vitamin A and E in 24Q3 was 193.05 and 124.48 yuan/kg, respectively, +123.44% and +77.42% month-on-month; 2) Overseas stocks were strongly willing to replenish stocks, and exports increased dramatically. Under the influence of the BASF accident, overseas supply contracted significantly, and there was a strong desire to prepare goods ahead of time, resulting in a sharp increase in Q3 vitamin A and E exports. The export volume was 1,761 tons and 27,406 tons, respectively, +62.65% and +39.37% over the same period last year. Vitamin sales were strong during the off-season, and the company achieved the highest single-quarter performance in history.
The BASF accident added another variable, and it is expected that the stock market will be renewed again in Q4. On October 17, BASF issued an announcement announcing that the resumption of production of vitamin A devices will be delayed by 3 months to April 2025, and that the resumption of production of vitamin E devices will be delayed by 6 months until July 2025. The fourth quarter was originally the peak season for overseas demand. We believe that the delay in the resumption of production at BASF will drive overseas efforts to increase reserves, so vitamin exports are expected to increase further. After BASF announced a delay in resuming production, intermediate channel inventories were drastically reduced, and vitamin A and E prices began to rebound on October 21 and 22. According to Hangzhou Weigao, stocks of vitamin E at low prices have basically been exhausted. With the arrival of the pace of replenishment, vitamins are expected to usher in a new round of rising prices.
The project reserves are rich, and the next stage of growth begins. In the nutrition sector, construction of the 0.18 million ton/year liquid methionine (pure) project built by the company and Zhenhai Refining Company is progressing steadily; the fragrance and fragrance sector, the series of aldehyde projects, SA projects, and the first phase of the fragrance industrial park project are progressing steadily; the new materials sector, PPS application development in new fields is progressing smoothly; the EJ project continues to advance, and it is planned to invest about 10 billion yuan in the construction of a new nylon material project in Tianjin. Furthermore, the pilot test of the company's glyphosate project was successful, and it is expected that the 0.06 million tons/year phosphorus-containing amino acid project will proceed in an orderly manner. The focus of the company's future capital expenditure has shifted from nutritional products to new materials, and the next stage of growth is about to begin.
Investment advice: Xinhecheng is one of the top four vitamin companies in the world. The vitamin business boom recovered rapidly in 2024. In the long run, the company has abundant reserve projects and guaranteed long-term growth. Considering Vitamin Q4 and price increases, we expect the company to achieve net profit of 6.058/7.206/7.767 billion yuan (previous value was 5.77/ 6.89/ 7.451 billion yuan), +124.0%/+7.8% compared to the same period last year; The corresponding PE is 12/10/9 times. Referring to historical valuation levels, 15 times PE was given in 2024, and the corresponding target price was 29.40 yuan, maintaining the “strong push” rating.
Risk warning: Product prices fall short of expectations; projects under construction fall short of expectations; raw material prices fluctuate greatly.