Hubei Jianghan New Materials (SH:603281)2024-05-21 01:00Investment Rating - The report initiates coverage with an "OUTPERFORM" rating for Jianghan New Materials (603281 CH) [11][22]. Core Views - The company is a leading enterprise in functional silanes, with sales volume maintaining rapid growth in Q1 2024, supported by expansion and integration strategies for long-term growth [1]. - In Q1 2024, the company achieved a net profit of Rmb1.45 billion, reflecting a year-on-year growth of 0.2% [3][11]. - The company’s revenue for 2023 was Rmb22.77 billion, with a year-on-year decline of 31.23%, primarily due to a significant drop in product prices [11][22]. Financial Performance - The company reported revenues of Rmb25.35 billion, Rmb33.12 billion, Rmb22.77 billion, and Rmb5.87 billion for the years 2021 to Q1 2024, with respective year-on-year growth rates of 86.02%, 30.62%, -31.23%, and 0.98% [7]. - The net profit attributable to shareholders for the same period was Rmb6.84 billion, Rmb10.40 billion, Rmb6.55 billion, and Rmb1.54 billion, with year-on-year growth rates of 120.43%, 52.16%, -37.05%, and -0.06% [7]. - The company’s gross margin for 2023 was 37.55%, a decrease of 5.14 percentage points year-on-year [11]. Business Segments - The functional silane business is expected to maintain a stable gross margin, projected at 39.42% from 2024 to 2026 [5]. - The company has ongoing projects to expand its functional silane capacity by 60,000 tons per year and intermediate products by 30,000 tons per year, with a green circular industrial park project expected to start production in 2025 [13][22]. Market Position - The company’s market strategy includes enhancing domestic sales, optimizing product structure, and developing new customers, resulting in a significant increase in domestic sales volume [11][13]. - The company has successfully onboarded 169 new customers, including 24 overseas clients, to expand its market reach [11].