investment points:

the company released the performance forecast for the first quarter of 2024: during the reporting period, the company expects to realize operating income of 6.50-0.72 billion yuan, up 28.60-42.45 year on year; It is estimated that the net profit attributable to the parent will be 0.94-0.115 billion yuan, up 63.65-100.20 year on year. It is estimated that the net profit from non-return to the parent will be 0.91-0.112 billion yuan, year-on-year growth of 79.04-120.36 per cent, with a significant increase in single-quarter results.

long-chain dibasic acid downstream demand rebounded, sebacic acid replacement continued, 24Q1 performance increased significantly month-on-month.

The company is a pioneer in the field of domestic biological manufacturing. In 2003, it realized the industrialization of long-chain dibasic acid by biological method, and gradually completed the market substitution of similar products by chemical method, with a leading market share in the world. In 2023, due to the international market environment, industry and other factors, especially the decline in sales in the European market, the company's long-chain dibasic acid sales fell short of expectations. However, since 2024, downstream demand continues to pick up, the company seizes market opportunities, increase product sales, while fully expanding the new product sebacic acid market, increase customer share, products are gradually replicating the company's lauric acid on the chemical method of substitution process. Therefore, the rapid recovery of 24Q1 company's long-chain dibasic acid business led to a significant increase in performance from the same month-on-month.

Continuously promote the application and development of bio-based polyamide, join hands with China Merchants Group to strengthen market promotion, and open up new growth space for collaborative development. In 2023, the company issued a fixed increase plan, to Shanghai Yaoqin (to be established) to issue shares to raise no more than 6.6 billion yuan, China Merchants Group will indirectly hold the company's shares through Shanghai Yaoqin is expected to exceed 5%. At the same time, the company and China Merchants Bureau Group signed a "business cooperation agreement", according to the agreement 2023-2025 China Merchants Bureau procurement and use of Kesai biological products in the amount of bio-based polyamide resin is not less than 1, 8, 200000 tons. China Merchants Group's main business involves shipping, ports, shipping, finance, real estate, energy and many other fields, combined with the company's bio-based materials and China Merchants's resource endowment, jointly develop bio-based polyamide fiber composite, pultrusion process and container, construction, photovoltaic, logistics and other fields of application technology, providing a broad application scenario for synthetic biological manufacturing.

investment analysis opinion: temporarily maintain the company's 2023-2025 net profit forecast of 3.67, 5.92, 0.917 billion yuan, the current market value corresponding to PE of 60, 37, 24X, maintain the "overweight" rating.

risk tips: 1) the construction progress of new projects, the progress of product production and the risk of sales uncertainty; 2) the risk of core technology leakage, the loss of technical personnel and the lag of technology research and development; 3) the risk of large fluctuations in raw materials and energy prices.