China Catalyst (SH:688267) Guohai Securities·2024-04-25 08:00Investment Rating - The report gives a "Buy" rating for the company, marking its first coverage [21][50]. Core Insights - The company, as a leading domestic catalyst enterprise, is expected to gradually increase its market share and achieve rapid growth through the release of production capacity from fundraising projects, aiming for import substitution [8][50]. - The company's revenue for 2023 was 550 million yuan, a year-on-year decrease of 19.21%, with a net profit attributable to shareholders of 77 million yuan, down 49.34% [21][44]. - In Q1 2024, the company reported a revenue of 199 million yuan, a year-on-year increase of 61.19%, and a net profit of 35 million yuan, up 1610.19% year-on-year [22][26]. Financial Performance - The company’s projected revenues for 2024, 2025, and 2026 are 911 million yuan, 1.216 billion yuan, and 1.576 billion yuan, respectively, with corresponding net profits of 145 million yuan, 232 million yuan, and 347 million yuan [50][51]. - The company’s sales gross margin for 2023 was 32.83%, down 6.81 percentage points year-on-year, while the net profit margin was 13.99%, down 8.31 percentage points [21][44]. - The company’s operating cash flow for 2023 was 107 million yuan, an increase of 100.31% year-on-year, primarily due to increased sales collections [46]. Business Segments - The special molecular sieve and catalyst series generated revenue of 439 million yuan in 2023, a decrease of 31.26% year-on-year, while the non-molecular sieve catalyst series saw revenue growth of 280.39% to 81 million yuan [44][52]. - The company has ongoing projects in special molecular sieves and environmental catalysts, with production capacity expected to be released by the end of 2023 [48][29]. Market Position - The company has established a strong presence in the environmental industry, supplying major international chemical companies like BASF and has begun to replace imported products in the energy and fine chemical sectors [47].