Net profit for 24Q1 was 200 million yuan/-42.5% year-on-year. Zhejiang Longsheng released a quarterly report on April 29, achieving revenue of 3.49 billion yuan, yoy -7.0%, net profit to the mother of 200 million yuan (not deducted 280 million yuan), and yoy -42.5% (after deducting yoy +24.4%). We expect the company to have a net profit of 16.3/17.0/1.92 billion yuan in 24-26 years, corresponding to EPS of 0.50/0.52/0.59 yuan. Combined with the company's 24-year Wind consensus average of 18xPE, considering the company's leading edge in the dye industry, we will give the company 20xPE for 24 years, with a target price of 10.00 yuan to maintain an “gain” rating.
Downstream demand for dyes and intermediates is weak, waiting for the printing and dyeing industry to improve. According to Baichuan Yingfu, the price of disperse dyes and reactive dyes was 21/21 yuan/kg on April 28, which is relatively low since 2016. In the future, as demand for textile and garment terminals continues to pick up, the printing and dyeing industry boom is expected to improve.
Q1 The company sold 5.5/1.5/25,000 tons of dye/additives/intermediates, -5.7%/+7.6%/+8.1%, achieving operating income of 18.3/2.5/780 million yuan, -9.1%/-7.1% YoY, and an average sales price of 3.3/1.6/32,000 yuan/ton, -2.9% /flat/-13.5% YoY. Q1 The company's comprehensive gross profit margin was 27.2%, +0.5pct year on year, and the company's period expense ratio was 16.5%, +0.25pct year on year.
The real estate business is expected to generate revenue in the future, with non-recurring profit and loss falling significantly year on year. According to the company's annual report, the Huaxing Xincheng project completed pouring and construction of the 320-meter main tower office building foundation to the first floor, and completed the 150-meter super-high-rise residential project schedule. The future is expected to generate revenue for the company. Inventory at the end of Q1 is 29.4 billion yuan, an increase of 0.4% over the previous year. The Q1 company lost 140 million yuan from changes in fair value, an increase of 140 million yuan over the previous year, mainly due to profit and loss from changes in the fair value of financial assets held. At the same time, Q1 company's non-recurring profit and loss - 80 million yuan, a decrease of 200 million yuan over the previous year. The company's dye and intermediate technical upgrading and post-treatment projects progressed in an orderly manner. The project under construction at the end of Q1 was 835 million yuan, an increase of 6.2% over the previous month.
Risk warning: downstream demand falls short of expectations; real estate business cash flow risk; raw material prices fluctuate greatly.