$Olin (OLN.US)$In the past 5 years, revenue declined in 2019...
$Olin(OLN.US$In the past 5 years, revenue declined in 2019 and 2020, with an average growth rate of 8.4% for the remaining 3 years. Operating profit declined all the way to loss in 2020. It remained at a high level of more than 1.8 billion yuan in the past two years, and net profit reached 1.3 billion yuan and 1.33 billion yuan in 2021 and 2022, respectively.
Gross profit margin has declined all the way from 16.2% to 6.7% over the past 5 years, surged to 25.8% in 2021, and fell back to 23.3% in 2022. This level of change reflects an imbalance between supply and demand. Usually, it will soon enter a state of balance again, and growth is not as sustainable as revenue growth.
The company's operating expenses declined significantly in 2022, so despite the decline in gross margin, operating profit fell by only 3.9%.
The large losses in 2020 were mainly asset depreciation of 710 million dollars. Doing this kind of laundering in the year with the lowest profit actually hurt the company's long-term investment value, because it added a lot of uncertainty and needed to be covered by undervaluation.
The company reduced long-term loans from $3.84 billion to $2.58 billion in 2021, but there was little change in 2022. A close look at the balance sheet revealed that the 2022 share capital fell from 157 million to $132 million, reducing share capital by 16%. As a result, despite the decline in net profit, earnings per share increased by 12.3%.
Currently, the price-earnings ratio is 7. The valuation is relatively normal and not very attractive.
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