Events: In 2023, the Company achieved revenue/net profit/non-net profit 22.6/3.2/0.24 billion, up from +13.3%, -47.5% and -57.9%, respectively. Among them, 23Q4 single-quarter revenue/home-to-mother net profit 6.5/0.025 billion, year-on-year, respectively, 19.9, -86.4, to achieve non-net profit -0.025 billion. 24Q1 Company realized revenue/home-to-home net profit/non-net profit 4.48/0.42/0.015 billion, up -21.1, -68.1 and -87.0% YoY, respectively.

high sales volume, the cost is still in the downward channel. 1) Sales: With the gradual release of the company's Xining Phase II 14000 tons of production capacity, in 2023 the company's carbon fiber production of 19800 tons, YOY 86.2%, sales of 18000 tons, YOY 92.4%.

24Q1 sales volume is expected to exceed 4000 tons, continuing to maintain rapid growth year on year. 2) Price: We estimate the average price of 124000 yuan/tonne in 2023, YOY-41.1. According to Baichuan Yingfu data, 24Q1 carbon fiber average price of 95000/ton, basically flat month-on-month, we expect 24Q1 company average price month-on-month 23Q4 still has a small increase, mainly due to the price of each product to remain relatively stable, the company's product structure optimization, high value-added products accounted for an increase. We judge that at the current price, most of the civil goods manufacturers have been more difficult to achieve profitability, carbon fiber prices continue to have limited space to go down. 3) Cost: We estimate that the cost of tons will 87000 in 2023, down 21.2 percent year-on-year, mainly due to the further development of the scale effect. Driven by scale growth and cost reduction initiatives, we expect the company's ton cost to still have a large room for decline. 4) Profitability:

under the optimization of product structure and the company's cost reduction and efficiency, 24Q1 company's ton deduction non-profit compared to 23Q4 to achieve a turnaround.

capacity building steadily, leading advantage continued to strengthen. 1) Technology: the company in the country to take the lead in the carbon fiber "dry spray wet spinning" spinning technology, and with T700 grade, T800 grade, T1000 grade and M40 grade industrialization capacity, successfully realized the successful preparation of T1100 grade carbon fiber. In addition, the company successfully prepared dry-jet wet spinning T700 grade 48K large tow carbon fiber, product performance and international similar products, the product takes into account the small tow process performance and large tow cost advantages. 2) Production capacity: At present, the total production capacity is 28500 tons, Lianyungang 30000 tons project is steadily advancing, the polymerization workshop has been capped, key equipment into the procurement bidding stage, it is expected that by the end of 24 there will be individual production lines have been commissioned and put into production.

3) products: the company's products involve 1K-48K various models, in the traditional mature and strategic emerging areas of full coverage. The company has the ability to provide customized production of performance indicators according to the different needs of downstream applications, and can flexibly use the characteristics of flexible switching of production lines, dynamically adjust the production process, switch large tow/small tow and different specifications of carbon fiber production at any time to meet market demand. The company's T700 grade and above product series has maintained a market share of more than 50% in the domestic market for many years, of which 80% in the domestic hydrogen storage bottle field and 60% in the carbon/carbon composite field.

investment suggestion: we slightly lowered the net profit attributable to the parent for 24-25 years to 2.3, 5.6 and 0.76 billion (the original profit forecast for 24-25 years was 2.4 and 0.58 billion), mainly considering the relatively weak demand, and slightly lowered the average price assumption. the adjusted profit is 108.4, 44.8 and 33.1 times PE and 5.1, 4.8 and 4.3 times PB corresponding to the current stock price. The company is the domestic small and medium-sized tow carbon fiber leader, with scale and cost advantages, product structure continued to optimize, maintain a "buy" rating.

risk: production capacity is less than expected, prices fall sharply, raw material prices rise, costs fall less than expected, scale expansion of management risk, industry supply and demand measurement deviation, the use of information lag or update is not timely risk.