Lily Group(SH:603823) Haitong Securities·2024-05-23 15:39Company and Industry Key Points 1. Company Overview: Lily Group is a leading player in the high-end pigment industry, specializing in the production, research, and sales of organic pigments and intermediates. The company also produces and sells metallic sodium, a key material used in various applications such as indigo dyes, pharmaceutical intermediates, pesticides, and high-performance pigments. 2. Product Range: Lily Group offers a comprehensive range of organic pigments, including high-performance organic pigments (quinacridone, DPP, isoindoline, dioxazine, metal complexes, phthalocyanines, benzimidazolones, naphthols, and others) and traditional azo pigments (lake red, double azo yellow, fast yellow, single azo orange, double azo orange, and naphthols). 3. Market Position: In 2023, Lily Group held a 10% global market share in organic pigments, with a production capacity of over 40,000 tons. The company's pigment products are the main source of income, accounting for 90.32% of its total revenue in 2023. 4. Financial Performance: In 2023, Lily Group achieved a total operating revenue of 2.284 billion RMB, a decrease of 7.46% year-on-year. The company's profit总额 was 120 million RMB, a decrease of 43.96% year-on-year. 5. New Capacity and Projects: Lily Group is gradually putting into production new production capacity and advancing ongoing engineering projects. In 2023, the company planned to build a new project with an annual production capacity of 5,000 tons of high-performance organic pigments and supporting intermediates. Additionally, the company completed a trial production of the "Annual 8,900 tons of ammonia oxidation project" in Hubei Caili New Materials Co., Ltd., enhancing its industrial chain extension advantage. 6. Industry Outlook: The bankruptcy of global pigment supplier Heubach is expected to improve the pigment industry's prosperity, benefiting Lily Group's pigment product performance. 7. Risks: The report highlights risks such as changes in the macroeconomic environment, lower-than-expected downstream market demand, and production capacity under construction falling short of expectations. Additional Important Points 1. Metallic Sodium Production: Lily Group is involved in the production and sales of metallic sodium, with a stable downstream demand. The company's Inner Mongolia Yusheng facility has a 20,000 tons/year metallic sodium production capacity. 2. Intermediate Self-Sufficiency: Lily Group has a relatively complete product chain and self-supporting system, with the ability to produce key intermediates required in the production process of organic pigments. 3. ESG Commitment: Lily Group emphasizes environmental protection, social responsibility, and corporate governance as key components of its sustainable development strategy. 4. Research Report Distribution: The report is distributed by Haitong International, a global brand for equity research teams, and includes important disclosures, analyst certifications, and conflict of interest disclosures.