The company publishes its 2023 annual report and 2024 quarterly report. In 2023, the company achieved revenue of 26.918 billion yuan, -9.70% year-on-year; realized net profit to mother of 384 million yuan, -160.53% year-on-year. With 2024Q1, the company achieved revenue of 5.480 billion yuan, -10.79% year-on-year, and realized net profit of 32 million yuan, or +140.55% year-on-year.
Build catalyst production capacity to lay the foundation for new product promotion. The catalyst business is mainly based on Qilukeli. The products include four series of more than 80 products: sulfur-resistant conversion catalysts, hydrogen production catalysts, sulfur recovery catalysts, and hydrogenation catalysts. In order to further enhance Qilukeli's competitive advantage in the same industry, and also to have a better synergy with the parent company's chemical sector, Qilukeli plans to continue to invest in the expansion of chemical catalysts on the basis of the original four major catalyst categories and invest in the construction of 360 tons/year maleic anhydride catalysts. The completion and commissioning of the Qilu Keli maleic anhydride catalyst device can not only provide a catalyst for the company's maleic anhydride device and effectively reduce the production cost of the maleic anhydride device; it can also lay the foundation for the promotion of new products based on the parent company's production plant.
The layout of new materials will advance the PMMA project in due course. The company's proposed new materials business is mainly focused on Qi Xiang Huali and the company's own 200,000 tons/year methyl methacrylate (MMA) project. The main products include products such as methyl methacrylate (MMA) and isopropyl alcohol. MMA is mainly used to produce plexiglass, high-end paint, high-end displays and other household appliances, decorative materials, etc. The downstream product of MMA, polymethyl methacrylate resin (PMMA) is widely used in various fields such as lighting equipment, optical glass, instrumentation, optical fiber, aircraft cockpit glass, bulletproof glass, etc. In particular, with the rapid growth of the LCD market, the demand for optical-grade PMMA molding plastics has increased dramatically, with huge development potential and broad application prospects. The company will decide on the construction schedule of the PMMA project in due course according to market conditions.
Expanding the C3 industry chain, alcohols, lipids, polyethers, etc. are the future development direction. The company invested in the construction of 700,000 tons/year propane dehydrogenation project, 300,000 tons/year propane oxide project, and 80,000 tons/year acrylic acid and 60,000 tons/year butyl acrylate project. The company's carbon 3 industry chain has begun to take shape. Later, the company will vigorously build a carbon 3 industry chain based on existing propylene conditions to make up for shortcomings in the industrial chain within the Zibo base, focusing on promoting the development of alcohol, lipids, polyether and other industries.
Investment advice. We expect Qi Xiang Tengda's 2024-2026 EPS to be 0.17, 0.56, and 0.95 yuan respectively. Referring to the valuation level of comparable companies, they were given 1.8-1.9 times PB in 2024, with a corresponding reasonable value range of 7.79-8.23 yuan, maintaining a “superior to the market” investment rating.
Risk warning. Product prices fluctuated greatly, downstream demand fell short of expectations, and the progress of projects under construction fell short of expectations.