Company Announces 2024 Semi-Annual Report

The company's 24Q2 revenue was 0.33 billion, +0.1% year on year, net profit to mother 0.09 billion, +26% year over year, after deducting 0.1 billion yuan of non-return mother, +33.5% year on year;

24H1's revenue was 0.64 billion, +2.2% year on year, net profit to mother 0.17 billion, +21.2% year on year, after deducting 0.175 billion yuan without return to mother, +25.9% year on year. The company's 24H1 dividend was 0.09 billion, with a dividend rate of 52.3%.

By product, the company's 24H1 new materials and synthetic materials process solution revenue was 0.44 billion, +17.4%, accounting for 68.3%; recycled materials and degradable material process solutions revenue was 0.18 billion, -18.9%, accounting for 27.5%; and revenue from industrial AI integrated application solutions was 0.02 billion, -25.8% year-on-year, accounting for 3.5%;

By region, the company's 24H1 domestic revenue was 0.51 billion, +39.3% year over year; foreign revenue was 0.13 billion yuan, -50% year over year.

The company's 24H1 gross profit margin was 42.7%, +4pct year on year; net profit margin to mother was 27%, +4.2pct year on year.

By product, the gross profit margin of the company's 24H1 new materials and synthetic materials process solutions was 43.7%, +2pct; the gross profit margin of recycled materials and degradable material process solutions was 40%, +11.9pct year on year; and the gross profit margin of industrial AI integrated application solutions was 39.7%, 34.9pct year on year.

On the cost side, the company's 24H1 sales/management/ R&D/ finance ratio was 1.2%/5.9%/6.7%/-0.8%, respectively, -0.1 pct/+0.3 pct/+0.1 pct.

Changes in consumer consumption patterns are driving demand for civilian nylon fiber in the field of outdoor sports to increase at the industry level. Primary recycling of plastics is already ripe; key technologies for large-scale bio-based chemical fiber production are being promoted, and more attention is being paid to developing environmentally friendly green fibers; chemical fiber companies continue to promote their own digital transformation, and the key technical level of intelligent manufacturing in the industry is improving.

The high-quality nylon 6/66 civil fiber developed by the company has continuously received orders, which is a key factor in performance growth

Nylon 6 fibers are still the biggest application area for nylon 6 slices. The company has long been engaged in research on key core technology and equipment in the field of fiber-forming polymers, and continues to lead the technological progress of nylon 6/66 spin-grade polymeric slicing and high-quality civilian fiber industries with its independent research and development system. The company successfully contributed to the advancement of polymerization and spinning production technology for customers such as Taihua New Materials and Huading Co., Ltd., and successfully replaced various types of high-strength, fine, porous, and special-shaped nylon 6 fibers in domestic production, and the product differentiation rate was also increasing year by year.

In order to meet customer needs for comprehensive and integrated services throughout the project process, further expand the scope of business, cultivate new profit growth points and generate greater revenue, the company continues to extend vertically to the front and back ends of the entire life cycle of the project based on its own process expertise.

The company broke through the key technology of high-performance fiber recycling. The nylon chemical recycling solution was pioneered. The company is optimistic that chemical methods are more conducive to solving the treatment advantages of recycling clothing waste, and determined that developing chemical recycling technology is the only way to go in the sustainable development process of China's plastics industry. As the company's key layout direction for the next stage of recycled plastic technology, the chemical method will help the company form a comprehensive waste plastic recycling technology system where physical recycling and chemical recycling complement and promote each other, and match the high-value utilization scenario of low-value plastic waste to a greater extent.

The chemical recycling nylon material project signed by the company and Jiangsu Jiahua, a subsidiary of Taihua New Materials, was successfully delivered for use in the second quarter. Next, the company will actively lay out the chemical law cycle in the polyester industry to achieve a “closed loop” green recycling process from waste clothing to recycled polyester slices and recycled polyester fibers to new clothing.

Maintain profit forecasts and 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. We estimate that the company's net profit for 24-26 will be 0.375/0.46/0.571 billion yuan, EPS will be 1.18/1.44/1.79 yuan/share, respectively, and the corresponding PE will be 11/9/7X, respectively.

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