Kaili Catalyst & New Materials (SH:688269) Guotai Junan Securities·2024-02-27 16:00Investment Rating - The report maintains an "Accumulate" rating for the company, with a target price of 33.83 CNY, down from a previous forecast of 50.73 CNY [3][5]. Core Views - The company has shown a quarter-on-quarter revenue growth in Q4 2023, with a total revenue of 1.806 billion CNY, reflecting a year-on-year decrease of 4.04% [3][5]. - The report highlights that the prices of precious metals have stabilized and are expected to recover, which bodes well for the company's future performance [3][5]. - The company is positioned as a leader in the precious metal catalyst market, with multiple growth drivers anticipated in the coming years [3][5]. Summary by Sections Financial Performance - In Q4 2023, the company achieved a revenue of 4.66 billion CNY, down 19.99% year-on-year, but up 25.9% quarter-on-quarter [3][5]. - The net profit attributable to shareholders for Q4 2023 was 0.17 billion CNY, a year-on-year decline of 63.2% but a significant quarter-on-quarter increase of 157.88% [3][5]. - The overall gross margin has declined due to the falling prices of palladium and rhodium, with the sales business accounting for 91.78% of total revenue [3][5]. Earnings Forecast - The report adjusts the EPS forecast for 2023-2025 to 0.88, 1.54, and 1.97 CNY respectively, down from previous estimates of 1.21, 1.59, and 2.08 CNY [3][5]. - The 2024 PE ratio is projected at 22X, reflecting a cautious outlook on profitability due to ongoing pressures in the precious metals market [3][5]. Market Position and Growth Potential - The company is expected to see a gradual release of production capacity from its advanced catalyst materials projects, which will support revenue growth [3][5]. - The report emphasizes the potential for significant capacity expansion following the completion of its capital increase projects, which could help overcome performance ceilings [3][5]. - The company is involved in various sectors, including PVC, coal-to-ethylene glycol, and hydrogen fuel cells, indicating a diversified growth strategy [3][5].