Financial Performance - Revenue for the six months ended June 30, 2024, was RMB 7,261 million, a 0.87% increase from RMB 7,198 million in the same period of 2023[2] - Gross profit for the same period was RMB 1,440 million, representing a gross margin of 19.83%, up from 15.73% in 2023[2] - Profit before tax increased to RMB 673 million, compared to RMB 288 million in the previous year, marking a significant growth[2] - Net profit for the period was RMB 395 million, up from RMB 208 million in 2023, indicating a strong performance[3] - Earnings per share (basic and diluted) rose to RMB 0.17 from RMB 0.13 year-on-year[3] - The group reported a pre-tax profit of RMB 672,878 thousand for the period, reflecting an increase compared to the previous year[12] - The group achieved a pre-tax profit of approximately RMB 672,878,000, significantly up from RMB 287,755,000 in the previous year[51] Assets and Liabilities - Total equity as of June 30, 2024, was RMB 16,693 million, slightly down from RMB 16,938 million at the end of 2023[4] - Current assets decreased to RMB 6,748 million from RMB 7,648 million at the end of 2023[4] - Current liabilities were reduced to RMB 3,571 million from RMB 4,559 million, reflecting improved financial management[5] - The company reported a total asset value of RMB 17,220 million, down from RMB 17,388 million at the end of 2023[5] - The company’s total liabilities as of June 30, 2024, amounted to RMB 3,170,397,000, down from RMB 4,500,284,000 as of December 31, 2023[32] Segment Performance - For the six months ended June 30, 2024, total revenue reached RMB 7,261,012 thousand, with a significant contribution from the high polymer materials segment at RMB 2,032,921 thousand[12] - The operating profit for the high polymer materials segment was RMB 303,391 thousand, while the organic silicon segment reported an operating profit of RMB 53,681 thousand[12] - The revenue from the refrigerants segment was RMB 2,812,654 thousand, showcasing its importance in the overall revenue mix[12] - The organic silicon segment experienced a decline in operating performance, reporting a loss of RMB 222,336 thousand, highlighting challenges in this area[14] - The fluorinated high polymer materials segment reported external sales of RMB 2,032,921,000, a decrease of 10.64% year-on-year, accounting for 28.00% of total external sales[55] - The organic silicon division's external sales increased by 10.27% to RMB 2,759,094,000, accounting for 38.00% of the group's total external sales[57] - The refrigerant division's external sales grew by 6.82% to RMB 1,551,984,000, representing 21.37% of the group's total external sales[59] Research and Development - The company plans to continue focusing on research and development to enhance product offerings and market expansion strategies[2] - R&D expenditure for the first half of 2024 was approximately RMB 321,439,000, with 26 key R&D projects underway, primarily focused on high-end application materials[42] Cost Management and Efficiency - The group emphasized cost control measures, resulting in a noticeable decrease in procurement costs and other operational expenses[44] - Management improvements have led to significant cost reductions, with ongoing efforts to enhance procurement and inventory management[50] - The group maintained a high operational efficiency with over 90% utilization rate and achieved significant reductions in energy consumption and waste generation[43] Governance and Compliance - The company has complied with the corporate governance code except for the provision that the roles of Chairman and CEO should be separate[80][81] - The company’s governance structure includes various committees such as the Remuneration Committee and Risk Management Committee, ensuring effective oversight[75][78] - The company plans to continue monitoring and reviewing its risk management and internal control systems at least annually[79] - The Nomination Committee is responsible for appointing new directors and related matters, with a focus on maintaining a strong governance framework[76] Market Conditions and Future Outlook - The overall economic environment remains complex, impacting market demand and operational pressures on domestic companies[40] - The group is positioned to benefit from policy changes in the refrigerant industry, leading to improved product pricing and market demand[41] - The group plans to invest nearly RMB 200,000,000 in the construction of new projects, which are expected to drive future growth[42] Other Financial Metrics - Government subsidies recognized amounted to RMB 36,007,000 for the six months ended June 30, 2024, compared to RMB 34,350,000 for the same period in 2023, reflecting an increase of 4.8%[18] - Interest income from bank deposits decreased to RMB 14,598,000, down 67.3% from RMB 44,738,000 year-over-year[16] - Total income tax expenses for the six months ended June 30, 2024, were RMB 277,670,000, a substantial increase from RMB 79,686,000 in the same period of 2023[20] - The company reported a loss of RMB 20,544,000 from the sale of property, machinery, and equipment for the six months ended June 30, 2024, compared to a loss of RMB 2,281,000 in the previous year[23] - The company recognized deferred tax liabilities of RMB 14,000,000 related to undistributed profits as of June 30, 2024, compared to RMB 9,123,000 for the same period in 2023[22]

Summary of Conference Call Transcript Industry Overview - The discussion revolves around the smart machine industry, specifically focusing on the pricing trends of the second-generation smart machine model R22 Key Points - The price of the R22 smart machine has seen a significant increase, reaching approximately 23,000 in both domestic and international markets [1] - Reports indicate that the domestic price for the R22 has surged to as high as 27,000 to 30,000, although actual transaction prices are generally around 23,000 [1] - It is noted that quoted prices tend to be higher than the actual transaction prices, suggesting a discrepancy between market expectations and real sales [1]

Investment Rating - The report maintains an "OUTPERFORM" rating for Dongyue Group [3][5]. Core Views - In 2023, the company's net profit decreased by 82% year-on-year, with revenue of approximately RMB 14.493 billion, down 27.63% from the previous year. The gross margin fell to 16.81%, a decrease of 15.72 percentage points year-on-year [9]. - The fluorine silicon chemical industry is experiencing low prosperity, with increased supply capacity and unmet downstream demand leading to significant price declines for several major products [9]. - The company benefits from rising refrigerant prices, with notable increases in market prices for R22, R32, R125, and R134a as of May 7, 2024 [4][9]. Financial Summary - Revenue and profit forecasts for 2024 to 2026 are as follows: - 2024E: Revenue of RMB 19.958 billion, net profit of RMB 1.636 billion - 2025E: Revenue of RMB 25.314 billion, net profit of RMB 2.133 billion - 2026E: Revenue of RMB 32.169 billion, net profit of RMB 2.562 billion [5][7]. - The company’s R&D expenditure in 2023 was approximately RMB 935 million, accounting for 6.45% of revenue, with significant achievements in technological innovation, including 101 new product registrations and 81 new patents [4][9]. Business Segment Performance - The fluorinated polymer materials division reported a profit of RMB 337 million, down 83.07% year-on-year due to significant price declines [4][9]. - The refrigerant division achieved a profit of RMB 311 million, down 69.59% year-on-year, primarily due to falling prices of R142b products [4][9]. - The organic silicon division incurred a loss of RMB 331 million, down 171.31% year-on-year, affected by weak demand and increased competition [4][9]. - The dichloromethane, PVC, and caustic soda divisions recorded a profit of RMB 248 million, down 46.04% year-on-year, due to weak market demand and declining product prices [4][9].

Market Challenges and Performance - The fluorosilicon chemical industry faced significant challenges in 2023, with major product prices declining sharply due to rapid production capacity growth and weaker-than-expected downstream demand[3]. - Despite market pressures, the Group maintained stable operations, achieving growth in production and sales volume for some major products, which helped increase market share[6]. - The Group's profit before tax was approximately RMB653,171,000, a significant decline from RMB5,125,055,000 in 2022, and net profit was approximately RMB611,085,000, down from RMB4,176,117,000[26]. - The gross profit margin decreased to 16.81% in 2023, down from 32.53% in 2022, while the operating margin was 4.49%, down from 19.81%[26]. - The fluoropolymers segment reported external sales of approximately RMB4,552,407,000, a decrease of 29.82% from RMB6,487,010,000 in the previous year, accounting for 31.41% of the Group's total external sales[31]. - The refrigerants segment's external sales decreased by 34.15% to RMB2,871,580,000 from RMB4,361,050,000, accounting for 19.81% of the Group's total external sales[34]. - The organic silicon segment's external sales decreased by 26.86% to RMB4,862,426,000 from RMB6,648,326,000, accounting for 33.55% of the Group's total external sales[38]. Strategic Initiatives and Innovations - The Group developed over 100 new market users and some product sales reached record highs, demonstrating effective market strategy adjustments[8]. - The Group added 101 new product grades and maintained a strong R&D investment of approximately RMB 935,099,000, accounting for 6.45% of revenue[8]. - The Group's focus on technological innovation and market expansion is expected to strengthen its competitive edge in the industry[7]. - The Group plans to enhance the recycling rate of by-products and waste, including hydrogen by-products and wastewater[10]. - Future strategies include precise planning for high-end fine chemicals R&D and comprehensive utilization of by-products[11]. - The Group will increase technology development and high-end processing in high-end materials to enhance competitive advantages[12]. Financial Management and Cost Control - Administrative expenses decreased by 34.86% year-on-year, while finance costs reduced by 89.16%[10]. - The Group plans to optimize procurement standards to enhance cost reduction and efficiency, establishing stricter supplier approval standards and creating a supplier database[23]. - The net cash inflow from operating activities was RMB1,298,816,000, down from RMB5,082,541,000 in the previous year[47]. - The Group's total equity amounted to RMB16,938,409,000, down 8.41% compared to December 31, 2022[47]. - The Group's bank balances and cash decreased to RMB2,547,297,000 from RMB5,315,994,000, mainly due to insufficient net cash inflow from operating activities to cover investment and dividend payments[47]. Safety and Environmental Practices - Safety and environmentally friendly production practices are prioritized to ensure stable operations[9]. - The Group aims for "zero harm, zero accidents, and zero leaks" in its safety and environmental production goals[17]. - The management emphasizes the importance of safety and environmental protection in production processes, aiming for "zero injury, zero accident, and zero leakage"[19]. Corporate Governance and Management - The Company emphasizes the importance of corporate governance and compliance, with dedicated roles for oversight within its management structure[64]. - The Board has adopted and complied with the Corporate Governance Code during the year ended December 31, 2023, except for a deviation regarding the roles of chairman and CEO[129]. - The Company has established a Remuneration Committee, a Nomination Committee, a Corporate Governance Committee, and a Risk Management Committee to enhance governance[149]. - The Company has implemented a share buy-back and disposal transaction strategy as part of its capital management[139]. Shareholder Engagement and Communication - The Company has established various communication channels to enhance shareholder engagement, including an Annual General Meeting (AGM) for shareholders to raise comments and exchange views with the Board[194]. - The Chairman and Directors are available at the AGM to address questions from shareholders, promoting transparency[194]. - The report aims to provide timely access to key information for shareholders and the investor community[194]. Dividend Policy and Share Buy-back - The Board recommended a final dividend of HK$0.10 per share for 2023, down from HK$0.60 per share in 2022[26]. - The Company aims to maintain adequate cash reserves for operational and capital requirements, future growth funding, and enhancing shareholder value[71]. - The Company completed an off-market share buyback of 520,977,818 shares, with 150,000,000 shares from Macrolink Overseas and 370,977,818 shares from Macrolink International[102]. Risk Management and Compliance - The Company has established a whistleblowing policy for employees and stakeholders to report concerns confidentially[184]. - The Company has set up internal audit functions to monitor the effectiveness of risk management and internal control systems[182]. - The Risk Management Committee discussed compliance with code provisions of the CG code during its meetings[178].

Investment Rating - The report does not explicitly state an investment rating for Dongyue Group, but it provides detailed financial performance metrics and industry context that may inform investment decisions [4]. Core Insights - In 2023, the comprehensive profit attributable to the company's owners decreased by 82% year-on-year, with net profit down 85% and revenue down 27.63% [4][1]. - The gross margin fell to 16.81%, a decline of 15.72 percentage points year-on-year, attributed to low industry prosperity and increased supply capacity not meeting demand expectations [4][1]. - The company benefited from rising refrigerant prices, with significant year-on-year increases in prices for various refrigerants [4][1]. - The fluorinated polymer materials division saw an 83% decrease in profitability, primarily due to significant price declines in key products like PVDF [4][1]. - The refrigerant division's profit decreased by 70% year-on-year, mainly due to falling prices of R142b products [4][2]. - The organic silicon division reported a loss of RMB 331 million, a 171% decrease in profitability, due to weak demand and increased competition [4][2]. - The dichloromethane, PVC, and caustic soda divisions experienced a 46% decrease in profit, impacted by weak market demand and declining product prices [4][2]. - The company achieved significant technological innovation, adding 101 new product brands and completing 148 projects related to energy conservation and efficiency [4][3]. Financial Performance Summary - In 2023, Dongyue Group recorded revenue of approximately RMB 14.493 billion, a decrease of 27.63% year-on-year [4][1]. - The net profit was approximately RMB 611 million, down 85% year-on-year, while the comprehensive profit attributable to owners was approximately RMB 708 million, down 82% [4][1]. - The gross margin decreased to 16.81%, reflecting the challenges faced in the fluorine silicon chemical industry [4][1]. Division Performance - The fluorinated polymer materials division's profit was RMB 337 million, down 83.07% year-on-year [4][1]. - The refrigerant division's profit was RMB 311 million, down 70% year-on-year [4][2]. - The organic silicon division reported a loss of RMB 331 million, a 171% decrease in profitability [4][2]. - The dichloromethane, PVC, and caustic soda divisions recorded a profit of RMB 248 million, down 46.04% year-on-year [4][2]. Research and Development - In 2023, the company invested approximately RMB 935 million in R&D, accounting for 6.45% of its revenue [4][3]. - The company added 81 new patents, bringing the total to 620, and released 22 new standards [4][3].

Financial Performance - Total revenue for the year ended December 31, 2023, was RMB 14,493 million, a decrease of 27.8% from RMB 20,028 million in 2022[3] - Gross profit for 2023 was RMB 2,436 million, resulting in a gross margin of 16.81%, down from 32.53% in 2022[3] - Profit before tax decreased to RMB 653 million in 2023 from RMB 5,125 million in 2022, representing a decline of 87.3%[3] - Net profit attributable to owners of the company was RMB 708 million, a significant drop from RMB 3,856 million in the previous year[3] - Basic earnings per share for 2023 were RMB 0.32, compared to RMB 1.73 in 2022, reflecting a decrease of 81.5%[3] - Total equity as of December 31, 2023, was RMB 16,938 million, down from RMB 18,493 million in 2022[3] - The company declared a final dividend of HKD 0.10 per share, reduced from HKD 0.60 in the previous year[3] Revenue Breakdown - Revenue from high polymer materials was RMB 4,552,407,000, down 29.8% from RMB 6,487,010,000 in the previous year[13] - Revenue from refrigerants decreased to RMB 2,871,580,000, a decline of 34.1% compared to RMB 4,361,050,000 in 2022[13] - Revenue from organic silicon was RMB 4,862,426,000, down 26.8% from RMB 6,648,326,000 in the prior year[13] - Revenue from dichloromethane, PVC, and caustic soda was RMB 1,176,824,000, a decrease of 27.5% from RMB 1,624,811,000 in 2022[13] - Other business revenue increased to RMB 1,030,086,000, up 13.6% from RMB 906,791,000 in the previous year[13] Asset and Liability Management - The company's total assets decreased to RMB 17,388 million in 2023 from RMB 19,072 million in 2022[7] - The company reported a significant reduction in cash and cash equivalents, which fell to RMB 2,547 million from RMB 5,316 million in 2022[7] - Trade and other payables decreased to RMB 4,500 million in 2023 from RMB 5,409 million in 2022, indicating improved cash flow management[7] Market Strategy and Future Outlook - The company is focused on expanding its market presence and enhancing product development capabilities[15] - Future outlook includes continued investment in new technologies and potential mergers and acquisitions to drive growth[15] - The company plans to focus on expanding its market presence and enhancing product development in response to the declining revenue trends[16] - The company is exploring potential mergers and acquisitions to strengthen its market position and diversify its product offerings[16] - New product development initiatives are underway, particularly in high-performance materials and refrigerants, to capture emerging market opportunities[16] Research and Development - The group reported total research and development costs of RMB 935,099,000 in 2023, up from RMB 1,310,535,000 in 2022, reflecting a decrease of 28.6%[31] - R&D expenditure for the year was approximately RMB 935,099,000, accounting for 6.45% of total revenue[56] - The group aims to enhance high-end material development and promote comprehensive utilization of by-products, focusing on market-driven R&D[61] Cost Management - Employee costs totaled RMB 1,345,678,000 in 2023, down from RMB 1,880,403,000 in 2022, indicating a reduction of about 28.4%[38] - Administrative expenses decreased by 34.86% year-on-year, while financing costs dropped by 89.16%[58] - The group plans to optimize procurement standards and establish stricter supplier admission criteria to reduce costs and improve efficiency[65] Corporate Governance - The audit committee reviewed the financial statements for the year ending December 31, 2023, and discussed internal controls and financial reporting matters[95] - The remuneration committee was established to consider the compensation of the company's directors and senior management[96] - The company established a Nomination Committee on March 18, 2012, chaired by Mr. Zhang Jianhong[97] - The company formed a Corporate Governance Committee on March 21, 2013, with Mr. Zhang Jianhong as the chairman[98] - A Risk Management Committee was established on August 13, 2015, chaired by Mr. Ding Lianghui[99] Shareholder Information - The company proposed a final dividend of HKD 0.10 per share for the year ending December 31, 2023, down from HKD 0.60 in 2022, subject to shareholder approval at the annual general meeting on June 6, 2024[88] - The company entered into a share repurchase agreement on October 23, 2023, to buy back 520,977,818 shares, representing approximately 23.12% of the issued share capital, for a total consideration of HKD 3,698,700,646, or approximately HKD 7.1 per share[91] - The share repurchase and sale transaction was approved at a special general meeting on December 18, 2023, and is expected to be completed by March 5, 2024[92] Environmental and Safety Management - The management emphasizes safety and environmental protection as a key competitive advantage, targeting "zero harm, zero accidents, and zero leaks"[63] - The group is committed to enhancing its safety and environmental management system, with no safety incidents reported during the year[57]

Group 1 - The core viewpoint of the article indicates that Dongyue Group (00189) has experienced a stock price increase of over 5%, currently trading at 7.18 HKD with a transaction volume of 43.2016 million HKD [1] - Dongyue Group issued a profit warning, expecting a year-on-year decrease of approximately 82% in net profit attributable to shareholders for 2023 [1] - According to Industrial Securities, Dongyue Group is a leader in China's fluorosilicone industry, benefiting from integrated advantages in both fluorochemical and silicone chemical sectors [1] Group 2 - The supply-demand dynamics are improving due to the implementation of the third-generation refrigerant quota, which, along with seasonal catalysts, is driving price increases [1] - The long-term potential for fluorinated polymer materials is promising [1] - In December 2023, Dongyue Group's shareholders' meeting approved a resolution to repurchase all 23.12% of shares held by Xinhua Group and to cancel these shares [1] Group 3 - Dongyue Fluorosilicone Technology, a wholly-owned subsidiary, plans to sell its 23.12% stake in Dongyue Polymer, Dongyue Silicon Materials, and Dongyue Future Hydrogen Energy to Xinhua Group at the same price [1] - Following the completion of these share transactions, Xinhua Group will no longer hold any shares in the listed company Dongyue Group [1] - As of March 5, 2024, Dongyue Group has completed the repurchase of 521 million shares held by major shareholder Xinhua Group and will proceed with the cancellation of these repurchased shares [1]

智通财经APP讯，东岳集团(00189)发布公告，预计集团截至2023年12月31日止年度的公司拥有人应占净 溢利，仍基本维持了上半年的下滑幅度，与截至2022年12月31日止年度相比可能取得大幅减少约82%。 董事会根据现有资料分析，认为上述截至2023年12月31日止年度的公司拥有人应占净溢利下跌的主要原 因为集团的部分主要产品截至2023年12月31日止年度的平均市价与截至2022年12月31日止年度相比有大 幅下跌，导致集团截至2023年12月31日止年度的收入亦有所减少;及截至2023年12月31日止年度原材料 价格的变动不足以弥补产品市价下滑对集团净利润造成的影响。 ...

证券研究报告 ＃industryId＃ 化工行业 ＃investSuggestion＃ ＃ ＃00189.HK ＃东dy岳Com集pa团ny＃ 增持 （首次） 关注制冷＃ 剂t旺itle季＃ 行情催化 ＃createTime1＃ ＃市场ma数rk据etData＃ 2024 年2月 28 日 日期 2024/2/28 投资要点 收盘价（港元） 6.91 ＃sum我mar们y＃的观点：东岳集团是中国氟硅行业龙头，公司股权结构优化，制冷剂 总股本（亿股） 22.5 业务边际改善，高分子材料业务长期空间可期。我们预计公司2023-2025 年归母净利润分别为5.7、13.0、15.4亿元（人民币，下同），分别同比-85.2%、 流通股本（亿股） 22.5 +127.4%、+18.6%，对应2024年2月28日收盘市值的PE倍数分别为24.8x、 归母净资产（亿元） 145.7 10.9x、9.2x；首次评级覆盖给予公司“增持”评级，建议投资者关注。 总资产（亿元） 233.0  氟硅行业龙头。东岳集团是中国氟硅行业龙头，氟化工（氢氟酸+制冷剂+ 每股归母净资产（元） 6.47 含氟高分子材料）和硅化工（单体+中间 ...

Investment Rating - The report does not explicitly state an investment rating for Dongyue Group Core Insights - Dongyue Group is a leading player in China's fluorochemical industry, established in 1987 and listed on the Hong Kong main board in 2007. The company has grown into a significant production base for fluorosilicon materials and serves as a key supplier for renowned domestic and international companies [3][41] - The company benefits from the rising prices of refrigerants, with the global refrigerant market expected to grow from 202 tons in 2024 to 229 tons in 2029, reflecting a compound annual growth rate (CAGR) of 2.5% [13][25] - The fluorinated polymer materials segment has vast potential, with applications across various industries including construction, electronics, and aerospace [34][39] Summary by Sections 1. Company as China's Fluorochemical Leader - Dongyue Group is recognized as a leading enterprise in the fluorochemical sector in China, focusing on the manufacturing and distribution of refrigerants, polymers, and other chemical products [3][41] 2. Benefiting from Rising Refrigerant Prices - The company is positioned to benefit from the increasing prices of refrigerants, with specific price increases noted for various refrigerants such as R22 and R32 [25][26] 3. Vast Space for Fluorinated Polymer Materials - The fluorinated polymer materials segment includes products like PTFE, PVDF, and FKM, which have extensive applications in multiple industries [34][39] 4. Subsidiary Dongyue Silicon Materials as a Leader in Organic Silicon - Dongyue Silicon Materials, a subsidiary, is a major player in the organic silicon market, producing a range of products including silicone rubber and intermediates [41] 5. Synergy Between Dichloromethane, PVC, and Caustic Soda Segments with Refrigerants - The report highlights the interdependence of the dichloromethane, PVC, and caustic soda segments with the refrigerant division, indicating a collaborative operational strategy [6] 6. Future Hydrogen Energy IPO Aspirations - Dongyue Group is planning to pursue an IPO for its hydrogen energy segment, indicating future growth and diversification strategies [6] 7. Profit Forecast - The company has shown a compound annual growth rate (CAGR) of 38% in net profit from 2019 to 2022, with a revenue CAGR of 16% during the same period [6][8]