Maintain an “increase in holdings” rating. Due to the smooth price increase of the company's products and the rapid release of large customers, the adjusted EPS for 22/23 was 6.87/8.92 yuan respectively (originally 23/24 was 6.84/9.80 yuan), and the new 25-year EPS was 10.08 yuan. Due to the large market space for lubricant additives and high barriers to compound products, the company's penetration rate increased rapidly, maintaining a target price of 205.2 yuan.
22Q4 reached another record high, exceeding market expectations. In 2022, the company achieved revenue of 3,046 million yuan, +181.77% year on year, of which Q4 was 1,004 million, -1.67% month on month; net profit returned to mother was 588 million, +192.53% year on year, of which Q4 was 225 million, +3.69% month on month, net profit returned to mother after deduction of 551 million, +0.18% year-on-year, of which Q4 was 227 million, +6.57% month on month.
After the API was passed, overseas expansion exceeded expectations. Since the company's CI-4, SN, and SP grade compounds have passed the bench tests of authoritative foreign third parties in the past 2 years, they have laid a good foundation for overseas expansion. The company sold a total of 143,300 tons of lubricant additives in 2022 (global penetration rate of about 3.3%), +112.35% compared to the previous year, mainly due to overseas market expansion. The company's overseas revenue reached 2,430 billion yuan, +367.80% year on year, up to about 80%; the average product price was 20035 yuan/ton, +35.50% year on year, mainly due to an increase in the proportion of compound structures. With the gradual certification of the company's major overseas customers, the market is expected to open up further.
The company's production capacity has been steadily expanding, supporting sales growth in the global market. During the reporting period, the company's lubricant additive (single agent) production capacity was 170,000 tons, ranking steadily among leading domestic enterprises, with a production capacity of 550,000 tons under construction, of which 90,000 tons will be gradually expanded in 22Q2, which is expected to further seize global share.
Risk warning: Market development falls short of expectations, raw material prices are rising