The annual performance of 2023 is lower than our expectations, and the 1Q24 deduction of non-net profit is in line with our expectations in 2023, the company's revenue is 5.588 billion yuan (YoY-10.84%), the net profit belonging to shareholders of listed companies is 45.77 million yuan (YoY-92.45%), and the deduction of non-net profit is 99.17 million yuan (YoY-76.35%). Among them, dyes / auxiliaries / itsSurvivorrouletteHis chemical raw materials realized revenue of 36.5 pounds 1.77 pounds yuan (YoY-0.29/-40.7/-26.57%) and gross profit margin of 13.38 pounds 12.18 pounds 17.61 percent (YoY-1.04/-8.1/-13.59pcts) respectively. The performance is lower than we expected, mainly because 1) the downstream textile printing and dyeing demand is sluggish. 2) with the rapid development of overseas dyestuff industry, the supply of domestic dyestuff market increases, the competition in dyestuff market intensifies gradually, and the price of dyes decreases. The company's 1Q24 realized revenue of 1.25 billion yuan (YoY-6.89%), net profit of 1.31 million yuan (YoY-85.79%) belonging to shareholders of the listed company, and deduction of non-net profit of 29.74 million yuan (YoY+3055%). The company's 1Q24 deduction non-net profit is high, and the performance is in line with our expectations. The trend of dye sales is going up against the trend. The company's dye sales totaled 177100 tons (YoY+10.94%) in 2023. Under the environment of increased domestic and foreign supply and more fierce competition in the dye industry, the company's dye sales increased against the trend and consolidated.SurvivorrouletteGained a position in the industry. The company has a total of 44 technical renovation projects in 2023. Leap earth dye cationic dye project, Dibang chemical dye technical renovation project phase II project construction, Taibang environmental overall wastewater system process upgrading transformation, leap soil new materials, Jiacheng chemical waste acid concentration plant construction and other projects proceed in an orderly manner. From the perspective of subsidiaries, the loss of Jiangsu base has a great drag on the annual performance of 2023. Jiangsu Mingsheng and Jiangsu Expedition lost 140 million yuan respectively in 2023. We believe that with the continuous promotion of cost reduction measures in Jiangsu base, the impact of investment income slows down, and the fundamentals of the company are expected to be repaired step by step. It is proposed to cancel all the repurchased shares and reduce the registered capital. The company issued a proposal on July 17, 2020 to use 200-400 million yuan of its own funds to buy back shares for equity incentives or employee stock ownership plans. If the aforementioned purpose is not implemented within 36 months after the completion of the share repurchase, the unused part will be cancelled by the relevant procedures. As of July 16, 2021, the company has bought back a total of 26 shares of the company.Survivorroulette, 500Survivorroulette095 shares, accounting for 2.3034% of the company's current total share capital, the 3-year period for the completion of the repurchase is about to expire, and the company intends to cancel all 26500095 shares in the repurchase special securities account. We believe that the company's share buyback and cancellation is expected to thicken the company's EPS, which is beneficial to medium and small investors, the fundamental recovery of the main business is imminent, and the value of long-term investment is highlighted. Profit forecast and valuation the supply and demand pattern of the dye industry needs to be reshaped urgently. We have lowered the 2024 net profit by 63.8% to 233 / million yuan, and introduced a new net profit of 300 million yuan in 2025. The current stock price corresponds to the price-to-earnings ratio of 32.6 times / 25.4 times in 2024. To maintain the outperforming industry rating, taking into account the adjustment of earnings forecasts and the firm market share of the company under the downward situation of the industry cycle, we maintain the outperforming industry rating and target price of 8.5 yuan, corresponding to 41.9 times 2024 price-to-earnings ratio and 32.6 times 2025 price-to-earnings ratio. 28.6% upside compared to the current stock price. The demand for risk dyes recovered less than expected, the production capacity of dyes / intermediates expanded greatly, and the base in northern Jiangsu was not as expected. [disclaimer] this article only represents the views of a third party and does not represent the position of Hexun. Investors operate accordingly, at their own risk.

[disclaimer] this article only represents the views of a third party and does not represent the position of Hexun. Investors operate accordingly, at their own risk.