投资建议：考 虑到新材料对外销售规模低于预期，下调2024-2025年EPS 预测至1.29/1.78 元（调整前为1.55/1.95 元）、新增2026 年EPS为2.42 元，给予2024 年行业平均的20 倍PE，维持目标价25.07 元，维持“增持”评级。Introduction to this report:
In 2023, the company's profit declined year-on-year due to fluctuations in product structure and exchange rate; 2024Q1 benefited from a recovery in demand and the depreciation of the RMB, and net profit to mother increased 76% year over year; with the gradual expansion of new production capacity, a high increase in performance for the full year of 2024 can be expected.
Key points of investment:
Investment advice: Considering that the scale of foreign sales of new materials was lower than expected, the 2024-2025 EPS forecast was lowered to 1.29/1.78 yuan (1.55/1.95 yuan before adjustment), and the 2026 EPS was added to 2.42 yuan, 20 times the 2024 industry average, maintain the target price of 25.07 yuan, and maintain the “increase” rating.
Incident: 2023 revenue/net profit attributable to mothers/net profit deducted to mother were $9.8/1.1/80 million, respectively, +9.4%/-13.1%/-5.6%; of these, Q4 revenue/net profit to mother/ net profit deducted to mother were $2.8/0.1 billion, respectively, +35.5%/-37.9%/-48.1% YoY. 2024Q1 revenue/net profit attributable to mothers/net profit deducted from mother was $2.4/0.2/0.2 billion, respectively, +27.7%/+76.3%/+58.8% year-on-year. The 2023 results fell short of expectations, and the 2024Q1 performance exceeded expectations.
2023Q4 revenue reached a record high, but the profit side was under pressure, and 2024Q1 earnings picked up significantly.
1) 2023: Revenue was +9.4% year-on-year, and gross margin was basically the same. Among them, Q4 revenue reached a record high as overseas demand improved. However, in order to expand the domestic sales market, the company added low-end products. Affected by the product structure, Q4 gross margin declined. Furthermore, exchange rate losses increased due to RMB appreciation, so the company's Q4 profit was under pressure, dragging down the company's Q4 earnings. By product, the revenue of functional gloves in 2023 was 940 million, +6.4% year on year (of which sales volume +5%), gross margin was +1.1 pct year on year. Among them, the largest customer revenue was +12.5% to 180 million, accounting for 18%; ultra-high molecular weight polyethylene revenue was 0.3 billion, accounting for 3% of revenue. 2) 2024Q1: As downstream demand continued to improve, revenue also increased 27.7%, gross margin +0.2pct year on year. At the same time, benefiting from the devaluation of RMB, financial expenses improved by 0.06 billion year on year, profit improved significantly, and net profit to mother also increased 76%.
New production capacity is gradually being expanded, and a high increase in performance can be expected in 2024. The current production capacity of 18 million gloves has been filled, and the new production capacity of 72 million tons will gradually climb; the new production capacity of 3,000 tons of ultra-high molecular weight polyethylene will gradually be released, which is expected to contribute more performance growth in 2024. The company continues to consolidate its core competitiveness in the field of individual security, and can be expected to increase its performance throughout the year.
Risk warning: New production capacity climbs less than expected, downstream demand falls short of expectations
