Core Viewpoint - The report from Guozheng International indicates that in 2024, Xuyang Group (01907) is expected to achieve total revenue of 47.543 billion RMB, a year-on-year increase of 3.2%, with a net profit of 0.02 billion RMB. The firm maintains a "Buy" rating with a target price of 4.2 HKD, highlighting the successful expansion into international markets and the continuous growth of its chemical and management businesses, demonstrating the advantages of its dual strategy in coke and chemicals [1]. Group 1: Coke Business - In 2024, the gross profit margin for coke and coking business is projected to be 8.6%, with a pre-tax profit of 0.87 billion RMB, including a pre-tax profit of 0.23 billion RMB in the second half of the year. The company has successfully launched 3.2 million tons of coke capacity in its Sulawesi production park in Indonesia, with total coke capacity reaching 23.8 million tons. Future projects include an additional 1.6 million tons in Pingxiang, indicating ongoing capacity expansion [2]. - As of March 2025, the coke price is expected to remain around 1,436.54 RMB/ton (excluding tax), with potential for fluctuations if economic stimulus policies are intensified [2]. Group 2: Chemical Business - The chemical business is anticipated to generate revenue of 2.07 billion RMB in 2024, reflecting a 10% increase, driven by a 27,000-ton increase in caprolactam sales and the resumption of production at the Dongming production park. The gross profit margin is expected to remain stable at 7.3%, with a pre-tax profit of 0.55 billion RMB, marking a 21% increase. The total volume of chemical products is projected to reach 5.28 million tons, an 8.8% increase [3]. - Following the commissioning of the caprolactam production line, the company has become the second-largest caprolactam producer globally, with an annual production capacity of 750,000 tons, with plans to expand to 1.5 million tons. The production cost of caprolactam continues to decline [3]. - In the hydrogen energy sector, hydrogen sales are expected to reach 20.1 million cubic meters in 2024, a year-on-year increase of 210%. The hydrogen company is collaborating with Beijing Yihuatong to promote bottle exchange transactions, extending its reach into the fuel cell business [3]. Group 3: Management Business - The management business is projected to generate revenue of 420 million RMB in 2024, a significant increase of 109%, primarily due to the addition of the Jilin aniline project and the Wuzhong coking project, resulting in a pre-tax profit of 0.55 billion RMB, reversing previous losses. The management of coke is expected to reach 5.5 million tons, while the chemical management scale is anticipated to be 960,000 tons [4]. - The ability to achieve profitability even during industry downturns underscores the effectiveness of the dual strategy in coke and chemicals [4].
国证国际：中国旭阳集团焦炭化工双轮驱动支撑利润 维持“买入”评级 目标价4.2港元