Event: on August 25, 2023, the company released its semi-annual report of 2023, with revenue of 492 million yuan, year-on-year-6.02%, net profit of 103 million yuan, year-on-year-21.51%, and non-net profit of 101 million yuan,-19.26%. Among them, Q2 achieved revenue of 244 million yuan in a single quarter,-8.15% year-on-year,-1.64% month-on-month; net profit of 52 million yuan, 16.13%, + 3.41%; and deduction of non-net profit of 50 million yuan,-12.46%, and + 0.20%.
When the price of thionyl chloride is reduced under short-term pressure, the performance of chloride is better. Inorganic chemicals (revenue-52.85% year-on-year, gross profit margin-7.88%): mainly include thionyl chloride and thioyl chloride. Among them, sulfoxide chloride is the company's main product, according to Baichuan Yingfu statistics, the average price of 2023Q2 is about 1583 yuan / ton, which is-51.96% year on year and-8.21% compared with the previous year, mainly due to weak downstream demand and weak support for the price and cost of superimposed raw materials, which leads to its low price hovering and short-term pressure. Carboxyl chloride (revenue + 22.64% year-on-year, gross profit margin 5.06%): mainly includes aramid polymerization monomer, p-nitrobenzoyl chloride, chloroacetyl chloride and so on. Among them, aramid polymerization monomer is the key product of the company, and its downstream product aramid has high bearing, which can be used in safety protection, automobile manufacturing, electronic information and other fields, and promote its profitability through technical renovation projects. Hydroxyl chloride (revenue + 75.22% year-on-year, gross profit margin + 5.77%): mainly includes chloroether and so on. With the continuous increase of hydroxyl chloride, its revenue and gross profit margin gradually increase.
Take thionyl chloride as the platform, PEKK and LiFSI to create the future growth space. The "one chain and two wings" layout created by the company has been gradually improved, in which the product matrix of new materials continues to be rich. PEKK: at present, the company is the first enterprise capable of large-scale production of PEKK in China, and the safety acceptance procedures for the first phase of its 2000 tons / year polyether ketone resin and molding application project have been completed, and it is currently in the stage of trial production, the product is about to be released, and there is a broad space for domestic substitution. LiFSI:2022 announced that the company will issue convertible bonds to non-specific objects and intend to raise no more than 650 million yuan for the construction of a new lithium salt (LiFSI) project for 10,000 tons of lithium batteries per year. According to the company announcement, the construction period of the project is 2 years and is expected to be gradually put into production in 2025. PEKK and LiFSI are new materials produced with thionyl chloride as raw materials to create the future growth space of the company.
Investment suggestion: the company has a number of new material products, including domestic alternative PEKK; while expanding the leading products sulfoxide chloride and aramid polymer monomer, with a significant increase in the future; in addition, the company's lithium salt project opens room for future growth. From 2023 to 2025, we expect the company to achieve operating income of 1.221 million yuan, net profit of 2.98 million yuan, and net profit of 438 million yuan, corresponding to 14.05 times of PE, respectively, maintaining the "overweight" rating.
Risk hint: the price of raw materials has risen sharply; the expansion of new products such as chlorinated chemicals is not as expected; downstream demand is lower than expected.