SD HEAD(SZ:002810)2024-05-08 07:02Investment Rating - The report maintains an "Outperform" rating for the company [6] Core Views - The company reported a revenue of 1.556 billion yuan in 2023, a year-on-year decrease of 9.7%, and a net profit attributable to shareholders of 220 million yuan, down 37.76% year-on-year [6] - In Q1 2024, the company achieved a revenue of 435 million yuan, representing a year-on-year increase of 16.1%, and a net profit of approximately 53.6 million yuan, down 26.4% year-on-year but showing a quarter-on-quarter recovery [6] - The cellulose ether sales volume increased steadily, while prices declined due to domestic demand and raw material costs [6] - The plant capsule sales volume reached a record high in Q1 2024, driven by recovering consumer demand [6] Summary by Sections Financial Performance - In 2023, the company’s cellulose ether production and sales volumes were approximately 46,000 tons (up 26.3% YoY) and 40,400 tons (up 16.6% YoY) respectively, with revenue from cellulose ether declining by 2.6% to 11.275 billion yuan [6] - The gross margin for cellulose ether fell by 5.02 percentage points to 25.52% due to increased depreciation costs from new capacity and lower product prices [6] - The company’s net profit margin decreased by 6.38 percentage points to 14.15% in 2023 [6] Product Insights - The plant capsule sales volume in 2023 was approximately 13.13 billion capsules (down 15.6% YoY) with revenue of about 246 million yuan (down 10.9% YoY) [6] - The gross margin for plant capsules improved by approximately 0.8 percentage points to 55% due to lower costs [6] Future Outlook - The company has adjusted its profit forecasts for 2024-2025, now expecting net profits of approximately 309 million yuan and 385 million yuan respectively, with a new forecast for 2026 at 489 million yuan [6] - The company is expanding its product line with the acquisition of hydroxyethyl cellulose and expects significant growth in plant capsule sales in 2024 [6]