STANLEY(002588) 海通国际·2024-04-23 10:30Investment Rating - The report maintains an "OUTPERFORM" rating for the company with a target price of Rmb8.45, based on a FY24E PER of 12.43x [4][8][10]. Core Insights - The company's recurring net profit increased by 55.82% year-on-year in 2023, with total operating revenue reaching Rmb9.991 billion, a 10.54% increase from the previous year. The net profit attributable to the parent company was Rmb701 million, up 58.94% year-on-year [1][14]. - The growth in operating income was primarily driven by increased sales volume of fertilizer products, supported by effective raw material procurement and inventory management strategies [1][14]. - The company plans to distribute cash dividends totaling approximately Rmb150 million, with a dividend of Rmb1.30 per 10 shares [1][14]. Financial Performance Summary - In 2023, the company produced 3.391 million tonnes of phosphate compound fertilizer, a 24.32% increase year-on-year, with sales of 3.131 million tonnes, up 16.93% year-on-year. The increase in sales was attributed to rising grain prices and stable downstream demand [2][15]. - The operating revenue from sulfur-based compound fertilizers was Rmb2.041 billion, a 34.07% increase year-on-year, while the gross profit margin improved to 17.39%. Chlorine-based compound fertilizers generated Rmb5.875 billion in revenue, up 6.95% year-on-year, with a gross margin of 17.28% [2][15]. - The company has ongoing construction projects that are expected to enhance its production capacity, including a new 400,000 tonnes/year sulfur-based compound fertilizer unit and several monoammonium phosphate plants [3][16]. Earnings Forecast - The earnings forecast for the company has been raised due to increased sales volume, with expected EPS for 2024-2026 at Rmb0.68 (+4.62%), Rmb0.77 (+2.67%), and Rmb0.90 (new) [4][8][12]. - The projected operating revenue for 2024 is Rmb11.488 billion, reflecting a 15% growth from 2023 [12]. ESG and Governance - The company adheres to national environmental laws and regulations, enhancing its pollution control measures and energy-saving initiatives [5][19]. - It has established a robust governance structure, including clear roles and responsibilities for its shareholders, board of directors, and management [19].