SD Lomon(SZ:002312) Guolian Securities·2024-04-29 00:30Investment Rating - The investment rating for the company is "Buy" based on the expected performance relative to the market index [9]. Core Views - The company reported a significant decline in revenue and net profit for 2023, with revenue at 7.708 billion and a net profit of 414 million, reflecting a year-on-year decrease of 23% and 61% respectively [2]. - In Q1 2024, the company achieved a revenue of 1.672 billion, down 16% year-on-year but showing a 16% increase from the previous quarter [2]. - The company aims for a revenue target of 8.252 billion for 2024, with plans to increase phosphate production capacity and complete several new facilities by the end of the year [4]. Financial Performance Summary - The company experienced a 23.1% decline in revenue in 2023, with a projected recovery starting in 2024, expecting growth rates of 8%, 15%, and 17% for the years 2024, 2025, and 2026 respectively [5][8]. - The net profit is expected to recover significantly, with projections of 550 million, 731 million, and 979 million for 2024, 2025, and 2026, respectively, indicating a compound annual growth rate (CAGR) of 33% over three years [5][8]. - The company’s earnings per share (EPS) are projected to increase from 0.29 in 2024 to 0.52 in 2026, with corresponding price-to-earnings (P/E) ratios decreasing from 23.6 to 13.2 [5][8]. Industry Insights - The phosphate market is under pressure due to declining product prices and high raw material costs, but there is optimism for recovery in Q2 2024 as phosphate exports begin [3]. - The company is strategically positioned in the phosphate resource sector, with significant reserves and plans to enhance its mining capabilities, which could address future supply shortages in the phosphate market [4]. - The company is also exploring the development of associated fluorine resources and a multi-resource green circular economy, indicating a long-term growth strategy beyond phosphate [4].