CAPCHEM(SZ:300037)2024-05-24 01:32Investment Rating - The report maintains an "Outperform" rating for the company, indicating a positive outlook despite recent performance challenges [5]. Core Views - The company's Q1 2024 performance was below expectations, with a revenue of 1.515 billion yuan, down 8% year-over-year and 20.31% quarter-over-quarter. The net profit attributable to shareholders was 165 million yuan, a decline of 32.8% year-over-year [5]. - The report highlights that the domestic electrolyte market is at a cyclical low, with average prices dropping significantly. However, there is an expectation for gradual recovery as excess capacity exits the market [5][6]. - The company is expanding its global footprint in the electrolyte business, with a new production facility in Poland expected to enhance overseas sales [5]. - Short-term pressures from depreciation and amortization of new factories are noted, but the long-term growth potential in the fluorochemical sector remains strong due to strategic acquisitions and market shifts [5]. - A share buyback plan of 100 to 200 million yuan is proposed, reflecting the company's confidence in its future [5]. Summary by Sections Financial Performance - For Q1 2024, the company reported total revenue of 1.515 billion yuan, with a year-over-year decline of 8% and a quarter-over-quarter decline of 20.31%. The net profit attributable to shareholders was 165 million yuan, down 32.8% year-over-year [5][6]. - The gross margin for the electrolyte business was 27.21%, showing a year-over-year decrease of 4.32 percentage points [5]. Market Conditions - The domestic electrolyte market is experiencing a downturn, with average prices at 21,000 yuan per ton, down 53.49% year-over-year [5]. - The report anticipates a gradual recovery in the market as underperforming capacities are phased out [5]. Future Outlook - The company is expected to achieve a net profit of 1.198 billion yuan in 2024, down from a previous estimate of 1.334 billion yuan, with projections of 1.710 billion yuan and 2.425 billion yuan for 2025 and 2026, respectively [5][6]. - The report emphasizes the long-term growth potential in the fluorochemical sector, particularly with the exit of 3M from certain markets by 2025 [5].