The company released the 2023 annual report and the 2014 quarterly report

24Q1 revenue of 310 million yuan increased 4.6%; net profit to mother increased by 15.9%; 23Q4 revenue of 326 million yuan, up 10.1%; net profit to mother of 0.79 million yuan, up 20.5%; net profit of net income to mother of 0.77 million yuan, up 17.7%; 23A revenue of 1,250 million yuan, up 17.9%; net profit attributable to mother of 290 million yuan, up 20.8%; after deducting non-return of 284 million yuan, up 18.5% from the same period.

In 2023, the company paid out a total of 153 million yuan in cash (tax included), with a dividend rate of 52.75%.

Revenue by product, new materials and synthetic material process solutions was 792 million yuan, an increase of 19% over the same period, accounting for 63.4%, and a gross profit margin of 41.3%;

Revenue from recycled materials and process solutions for degradable materials was 384 million yuan, an increase of 28.8% over the same period, accounting for 30.8%, and a gross profit margin of 31.9%;

The revenue of integrated industrial AI application solutions was 60 million yuan, down 24.8% from the same period, accounting for 4.8%, and the gross profit margin was 62.7%.

The 23-year gross profit margin was 36.7%, the same increase of 2.0pct; the net profit rate was 24.9%, the total annual rate was 13.5%, and the total annual rate decreased by 1.2pct; of these, the sales rate was 1.4%, the same increase was 0.2 pct, mainly due to the increase in business promotion expenses in 23; the management rate was 6.1%, the same increase of 0.2 pct; the financial rate was 0.3%, and the decrease in exchange losses was mainly due to an increase in deposit settlement and a decrease of 0.3 pct; the R&D rate was 5.7%, the same decrease of 0.3 pct.

Expanding the PA6/66 industry chain to create a new “lightweight” consumption scenario The company continues to consolidate the foundation of innovation, launch a continuous PA6/66 spinning - SSP technology route, improve the performance and quality stability of high-end PA filaments, and promote the supply of high-quality PA6/66 products in China. Based on the technical and market advantages of PA6/66 polymerization and spinning industries, the company has formed its own core technology solution layout upstream and downstream of the PA66 industry chain. The company will actively participate in the major expansion of domestic adiponitrile production capacity and accelerate the promotion of PA66 polymerization and spinning complete technology. PA6/66 downstream demand is becoming increasingly differentiated and high-end, which will drive differentiated competition in the upstream slicing field and open up a wider market space for the company.

In 2023, the green multifunctional PA new material integration project/recycled differentiated PA6 and differentiated PA66 integrated project contracts signed by the company with Taihua New Materials and its subsidiaries gradually entered the delivery stage and began to contribute revenue and performance to the company. The successful implementation of the above projects has effectively established the company's innovative competitiveness in the core technology field of fiber-forming polymers, with industrial chain integration as the main line and import substitution as the goal, to create a comprehensive strength of differentiated, high-end and customized system integration solutions.

The recycled and degradable materials business reached a record high, and the Asian food-grade recycled polyester model project was successfully implemented by the company's subsidiary Polymetrix and Japan's CircularPetCo. The largest single food-grade recycled PET project in Asia signed by, Ltd in 2022 has been successfully implemented. It began contributing revenue and performance to the company in '23. The total contract for the project was approximately RMB 281 million. The C-PET project is the first time that three major Japanese group companies, MITSY, VEOLIA-JP, and SVNDY, have joined forces.

1) On the one hand, it indicates that the recycling industry's appeal for capital investment is increasing, and the industry is gradually entering a stage of accelerated development; 2) On the other hand, the complex shareholder background of the project (MITSY focuses on recycling, VEOLIA-JP provides operations, and SVNDY guarantee applications) helps to create synergies and plays a leading role in capital integration and model innovation in the recycling industry.

After the completion of the above project, it is expected that all recycled rPET plastic particles produced can be used to produce rPET packaging with a recycled content of up to 100%, which is a landmark, and once again confirms that consumption upgrades in emerging markets in Asia have become a key driving factor driving the growth in demand for polyester packaging materials.

In 2023, the chemical recycling nylon material project signed by the company and Jiangsu Jiahua, a subsidiary of Taihua New Materials, has entered the delivery stage and has already begun to contribute revenue to the company. The project is based on the company's important layout based on the cutting-edge development trend of the international high-end recycled nylon materials industry. Using the industry's first chemical regenerated nylon fiber system solution of 10,000 tons or more for PA fabrics (nylon), waste wire, waste blocks, etc. from the PA production process are chemically depolymerized to obtain caprolactam monomers. Regenerated PA fibers of various specifications are prepared through melt spinning to achieve closed-loop recycling of PA fibers in the true sense of the word.

The successful implementation of the project will further improve the company's recycling technology system, accumulate model engineering cases, and establish a strategic layout of a series of complete process solutions around SSP plastic recycling technology, chemical fiber purification and chemical regeneration technology, covering the fields of recycled polymer materials such as rPET, rPA, rPP, etc., to provide a continuous impetus for the company to adapt to the economic development of plastics and textile recycling at home and abroad.

Adjust profit forecasts to maintain “buy” ratings

The company is an international advanced PA6/66 process solution provider. Technological breakthroughs drive the leapfrog development of raw materials; master the world's leading solid-phase polymerization (SSP) ultra-clean technology, and waste textile recycling meet breakthroughs; the company breaks through key technologies for high-performance fiber recycling and develops chemical cycle solutions for polyester and PA. Considering that it will take time for PA6 raw material caprolactam and PA66 raw material adiponitrile to enter production capacity, we adjusted our profit forecast. The company's net profit for 24-26 is 3.75/4.60/571 million yuan respectively (previous value 24-25 years ago was 382/490 million yuan, respectively), EPS was 1.18/1.44/1.79 yuan/share, respectively, and the corresponding PE was 13/11/9X, respectively.

Risk warning: international business risk and foreign exchange risk; risk of business fluctuation and loss of core talent due to technological change; risk of impairment of goodwill, etc.