Events:

On October 26, the company released its third-quarter performance report. In the first three quarters of 2023, the company realized operating income of 330 million yuan, an increase of 19% over the same period last year. The net profit of returning to the mother was 70 million yuan, down 2% from the same period last year. The net profit after deducting non-return was 63 million yuan, which was basically the same as the same period last year.

The release of production capacity is slow, the cost pressure still exists, and the performance is slightly lower than expected in a single quarter. Q3 company achieved operating income of 101 million yuan in 2023, an increase of 7% over the same period last year, down 14% from the previous year; and net profit from the home was 18 million yuan, down 17% from the same period last year and 28% from the previous year. In the third quarter, the company's homing net profit decreased by more than income, mainly because the financial income decreased by about 5 million yuan.

In 2023, the company was in the climbing stage of new factory capacity, and the increase in depreciation and labor costs put short-term pressure on profitability. The company achieved a gross profit margin of 33.49% in the third quarter, an improvement in 1.16pct compared with the second quarter. With the gradual launch of production capacity, the company's profitability is expected to continue to be repaired.

The company's "annual output of 8000 tons of aromatic ketones and its supporting projects" the second workshop DFBP samples are carrying out the relevant customer verification work, some customers have passed the verification and started mass production supply; the first workshop HAP customers have passed the verification and started to supply. After the orderly release of new production capacity, profitability is expected to rise significantly.

DFBP business is improving and the pattern is concentrated, HAP business is expected to expand rapidly in automotive, aerospace, medical and other fields, the rapid development of special engineering plastics PEEK and its raw material DFBP sustained rapid growth, but DFBP capacity expansion is slow, and the supply is concentrated in the company and Yingkou Xingfu two enterprises, the company is expected to fully benefit from the DFBP upstream. The company is the leader of domestic new cosmetic anticorrosive raw materials HAP, which is deeply bound to the international giant Dezhixin. After the new factory is put into production to break the capacity bottleneck, HAP business is expected to expand rapidly.

Deep ploughing aromatic ketone chemicals, 8000 tons of capacity expansion opens the growth space company ploughing aromatic ketone fine chemicals for more than ten years, in DFBP, HAP and other products have achieved a more prominent market position. The total production capacity of the company's old factory area is 4200 tons, and the newly increased production capacity of 8000 tons is expected to open up the company's growth space.

Earnings forecast, valuation and rating

In view of the slower-than-expected release of production capacity in the company's new factory, we estimate that the company's revenue in 2023-25 will be RMB 60,000,000 (the previous value is RMB 6.2pm), and the corresponding growth rate will be 52% and the corresponding growth rate will be 52%. The net profit of the return to the mother is 1.3 million yuan and 190 million yuan respectively (the previous value is 1.6 million yuan 2.1 / 250 million yuan). The corresponding growth rates are 18%, 46%, 30%, 0.94, 1.37, 1.79 and 31%, respectively, for CAGR. In view of the improvement of the industry structure of DFBP and HAP and the substantial expansion of the company's production capacity, we maintain the company's 24-year target price of 31.0 yuan and maintain the "buy" rating.

Risk hint: projects under construction are not advancing as expected, competition aggravates risks, and environmental protection costs rise.