SD Lomon(SZ:002312) EBSCN·2024-04-23 12:02Investment Rating - The report maintains a "Buy" rating for the company [4] Core Views - The company's performance is currently under pressure due to a decline in prices of fertilizers and phosphate chemical products, leading to a decrease in revenue and gross profit margins [3][4] - The company is actively pursuing a multi-resource green circular economy industrial chain, which includes the development of lithium and other mineral resources, to establish a solid foundation for future growth [4][14] Summary by Sections Revenue Performance - In Q1 2024, the company achieved revenue of 1.672 billion yuan, a year-on-year decrease of 16.22% and a quarter-on-quarter decrease of 26.00% [2] - The net profit attributable to the parent company was 104 million yuan, down 31.09% year-on-year but up 15.89% quarter-on-quarter [2] Price and Margin Analysis - The decline in prices for main products such as compound fertilizers and various phosphates has led to a drop in revenue and gross profit margins [3] - In 2023, the company's revenue from fertilizer products, industrial-grade monoammonium phosphate, and feed-grade dicalcium phosphate decreased by 10.5%, 12.5%, and 37.7% respectively [3] - The overall gross margin for the company fell by 7.7 percentage points to 13.1% in 2023, with Q1 2024 gross margin at approximately 13.7%, down 2.6 percentage points year-on-year [3] Profit Forecast and Valuation - The profit forecasts for 2024-2026 have been adjusted downwards due to the ongoing low prices of key products, with expected net profits of 653 million yuan, 802 million yuan, and 985 million yuan respectively [4] - The company is expected to continue its resource layout, which will support its future development [4] Investment Income - The company reported significant investment income from joint ventures, with 167 million yuan in 2023, a year-on-year increase of 775%, and 53.85 million yuan in Q1 2024, up 33.8% year-on-year [3]