occurrences
On April 29, the company released its 2023 annual report and 2024 quarterly report. In 23, the company achieved revenue of 8.187 billion yuan, +10.55% year-on-year; net profit to mother was 249 million yuan, +18.19% year-on-year.
1Q24 achieved revenue of 1,891 billion yuan, -11.75% month-on-month; net profit to mother was 0.79 yuan, +45.28% month-on-month; net profit without return to mother was 75 million yuan, +47.06% month-on-month.
reviews
All businesses went hand in hand in 2023, and profitability rebounded. In 2023, the company's revenue from advanced functional materials and devices, special powder metallurgy materials and products, high-quality special steel and welding materials, and environmental protection and high-end technology services were year-on-year
+7.14%/+12.09%/+4.44%/+44.00%, gross margin +2.02pct/-0.68pct/-0.08pct/+5.63pct, respectively. The company's advanced functional materials segment accounts for a large share of revenue from the rare earth permanent magnet materials business. Since the NdFeB N52 price ratio was -19.43% in 2023, the advanced materials business still bucked the trend; in 2023, tungsten and molybdenum concentrate prices were +4.97%/+37.34%, respectively. The increase in raw material prices or the reason for the decline in gross margin due to the increase in the company's special powder metallurgy business revenue. The company's gross margin was +1.21pct to 17.56% year over year; of these, 4Q23's revenue was +17.79% month-on-month, gross margin +3.63pct to 19.08% month-on-month, net margin +0.31pct to 3.74% month-on-month, and net profit to mother +40.95% month-on-month to 54 million yuan.
Rates declined during the period, and 1Q2024 performance increased. Q1 The company's gross margin was -2.45 pct to 18.62% month-on-month; the 1Q2024 market price N52 NdFeB, tungsten concentrate and molybdenum concentrate prices were -15.91%/+2.83%/+6.67% month-on-month, respectively. The decline in the price of finished products in the advanced materials business and the increase in the cost of tungsten and molybdenum products may be the reason for the month-on-month decline in gross margin. The Q1 period rate was -2.34pct to 13.27%; the sales rate was -0.03pct to 1.80% month-on-month, the management rate was -0.45pct to 5.59%, the R&D rate was -1.91% to 6.15% month-on-month, and the financial rate was +0.06pct to -0.27% month-on-month. The lower rate made up for the decline in gross margin, so the company's Q1 net profit margin was +1.49pct month-on-month to 5.23%.
Complete asset disposal and focus on core industries. The company completed a 14% share transfer to Antai Environment, and Antai Environment will no longer be included in the company's consolidated statements. The company will focus more on the two core industries of “refractory tungsten and molybdenum and rare earth permanent magnets”.
Profit Forecasts, Valuations, and Ratings
The company's revenue for 24-26 is estimated to be 85/98/11.5 billion yuan, with net profit attributable to mother of 3.01/3.76 billion yuan, EPS of 0.29/0.36/0.44 yuan, respectively, and corresponding PE of 30.40/24.50/19.63 times, respectively. Maintain a “buy” rating.
Risk warning
Raw material prices fluctuated; demand fell short of expectations; project progress fell short of expectations.