$Westlake (WLK.US)$ 🎯 2023.8.17 The current price is 133, w...

New data: 2022/Q4 and the whole year, the first two quarters of 2023

Beginning in 202Q4, revenue declined for 3 consecutive quarters, while operating profit and net profit declined for 4 consecutive quarters starting in 2022/Q3. The main reason for the decline was the decline in gross margin, which should be the reason for the sector cycle.

In 2022, revenue increased by 34.1%, operating profit increased by 9.3%, and net profit increased by 11%, far lower than the growth rate of the previous 3 quarters. Interest expenses accounted for 5.7% of operating profit, so the burden was not heavy.

In the first half of 2023, revenue fell 22.6%, operating profit fell 57.8%, and net profit fell 56.4%. Interest expenses accounted for 9% of operating profit. The ratio increased rapidly, and it is expected that the interest burden will soon reach a heavy level.

The balance ratio continued to fall to 47.2%, accounts receivable and inventory both declined, and cash increased.

Goodwill and other intangible assets were $3.674 billion, accounting for 33% of net assets of $11.077 billion, and long-term loans of $4.884 billion, accounting for 44% of net assets. The leverage ratio is not too high.

Although profits have been shrinking, net cash flow operations still significantly exceed net investment, still generating shareholder surpluses.

Currently, the price-earnings ratio is 7.7, and the price-earnings ratio has risen to 13. If net profit falls 60% for the whole year, the price-earnings ratio will rise to 19.3, and it is relatively stable to reduce positions to the observed position level.